Rt Hon Winston Peters

New Zealand First Leader

Member of Parliament for Northland
16 NOVEMBER 2015

Fonterra Millionnaires Club Needs a Rocket

Fonterra’s 22-strong “millionaires club” of managers needs a big serve from its board after belatedly realising branded products and food service is the way to go, says New Zealand First Leader and Member of Parliament for Northland Rt Hon Winston Peters.

“Hard working farmers will be tearing their hair out after reading the NZ Heraldtoday in which a Fonterra senior manager said branded products and food service were the way to go,” says Mr Peters.

The manager said Fonterra had been “rather late by standards of multi-national companies to realise that there probably should have been more focus on branded products and food service products earlier on, for the very simple reason that there is more value to be obtained out of each litre of milk sold in that type of business than there is to be made out of the commodities-type business.”

He went on: “The more value that you add to the functionality of the product, the higher the price at the retail level and the higher the margin is for Fonterra.”

Mr Peters said three years ago Fonterra chief executive Theo Spierings said the same thing trumpeting “volume, value and velocity” and a major strategy refresh.

“How has that worked out for farmers this season and the previous one, let alone the 835 staff sent packing from Fonterra?

“Farmers will say hallelujah about it going upmarket but they also want to know how accountable Mr Spierings and his expensive team of suits are for delivery.

“Farmers don’t begrudge paying top dollar for results, but they do begrudge paying 22 staff $1 million-plus for low milk prices and a heap of management clichés they’ve heard before. They want delivery,” says Mr Peters.

ENDS

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