Q + A
PANEL DISCUSSION 2
Hosted by SUSAN WOOD
In response to Theo Spierings Interview

SUSAN We’re back to the panel this morning. And, Bryce, do you think Theo Spierings should be resigning, or do you think he should be staying?

DR BRYCE EDWARDS – Political Scientist
I think that Spierings has to go, absolutely. This is a case where I think New Zealanders watching this show would have been hoping for Spierings to announce his resignation today. For the good of New Zealand, he should go, for the good of New Zealand farmers and for China, I think, because the fact is that the Chinese market will be expecting some big changes. And there’s a problem with corporate culture in Fonterra, obviously, and if they have any chance of repairing the reputation of Fonterra, the old guard will have to leave.

SUSAN Kate?

KATE SUTTON – Former Labour Party Board Member
I agree. I mean, I think what we’re told from New Zealand experts over in China is that Fonterra is New Zealand, so for me that’s a real wake-up call, for all of us, and we should we should be thinking about the fact that this guy we’ve just heard, he’s representing the whole of New Zealand out there on the stage, and he needs to take responsibility, you know. And I hate to say it – we’re told that these guys earn all this money – $100,000 a week – because they are taking the responsibility. Well, now is time to take it.

SUSAN Matthew, the thing I think that’s slightly frightened me from that interview, talking to Theo Spierings, was the fact that Sri Lanka is trying to block the Anchor brand. This has got bigger now because the Anchor brand is— that’s different to the whole Fonterra commodity business, isn’t it?

MATTHEW HOOTON – Political Commentator
Sri Lanka is one of the success stories. You go to a small village in Sri Lanka, and you see Mount Taranaki. You see New Zealand images in the smallest village there, and they’ve done a brilliant job there, actually, in Sri Lanka, taking out Nestle. And as Mr Spierings said, Anchor is better known than Coca-Cola in that market, so it is a problem. But, look, I think in the Sri Lanka case, that is just an effort by government to implement a non-tariff trade barrier probably in contravention of World Trade Organization rules, and it’s the sort of thing that happens. And this goes back to my point earlier, which we just don’t seem to see from Fonterra – everything is explaining all the time. You get briefed by Fonterra on these matters, and we heard it again. And you get given this timeline, ‘Well, this happened, and we had to make that decision. We couldn’t have done anything else.’ And if that’s the case, are we really saying this is the best possible world? Has Fonterra handled this better than it possibly can? Because as I said, this company has to accept milk has a lot of bacteria in it. That’s why it makes yoghurt; that’s why it makes cheese. They will have health scares as they grow and become a better company more and more, not less and less. And they simply have to do better than this at managing them. Nestle has a product recall going on every day of the week, practically, somewhere in the world.

SUSAN And what we don’t know, Bryce, is we see the public side of it, which was really really important. We don’t know how well they’ve actually managed what’s gone on behind the scenes. What we see in public is, though, a whole bunch of misinformation, a whole bunch of different timelines. And there’s sort of a lack of understanding of how the media operates and how we need to get information out.

BRYCE That’s right, and I think the public is incredibly cynical about Fonterra at the moment and what’s going on behind the scenes. They’re probably a bit more appreciative of the Government and how they’ve handled it in the last week, because the Government’s been very hands-on, so I think they get a tick from the public. Fonterra gets a cross. But there’s bigger issues going on in terms of ideology, I think, that could have longer-term ramifications here, because we’re seeing a questioning of the so-called ‘light-handed regulation’, the free market ideology in this area, and I think we will start seeing a bit more government intervention in this area.

MATTHEW I think that’s absolute nonsense.

BRYCE Well, I’m not—

MATTHEW This particular— This particular company is hardly a neoliberal experiment. Fonterra is run on—

BRYCE Fonterra’s about to be nationalised.

MATTHEW …pretty much Soviet grounds.

KATE The culture. The culture—

BRYCE We’re talking about the government regulation—

KATE And we didn’t see—

MATTHEW It’s highly regulated. The dairy industry is highly regulated, and I think the idea of sending in— I mean, Fonterra scientists are the best in the world. The Government will never employ scientists as good as Fonterra scientists. And this is the thing – over the years ahead, the Fonterra scientists are going to find more and more examples of health scares, because the scientists are going to—

BRYCE So is that a case for less regulation?

MATTHEW No, no, no. What it means is as the scientists find more and more potential problems because they get better at science, Fonterra simply has to stop this nonsense, which we heard this morning, of just explaining and trying to say, ‘Well, this happened and that happened.’

BRYCE I think it’s making—

MATTHEW ...ready to go on the front foot and say, ‘Yes, there’s been a problem, and this is what we’ve done, and this how it’s been sorted.’

SUSAN Let’s get Kate in here.

KATE He seemed pretty nonchalant about families and people and the consumer in there, and that’s the thing that we’ve got to come back to. You know, I’ve got mates with little babies who are still afraid, who are still scared. A friend on Facebook the other day, he said, ‘I don’t care about our economy. I just want to know whether it’s safe to feed this to my little girl.’

SUSAN You’re so right, Kate.

KATE And you know what? That’s what we have to come back to.

MATTHEW And the thing is—

KATE Of course our economy is important, of course everything he said is important, but people need to be sure that what they’re giving their babies is safe.

MATTHEW And Mr Spierings, I think, is also absolutely right when he said that the risk was infinitesimal. I mean, it was one in millions, and he’s absolutely right.

KATE That’s not how they feel.

MATTHEW But that’s not the point. When Thomas the—

SUSAN But if it’s your one million—

KATE It’s your baby.

MATTHEW When Thomas the Tank Engine products in 2007 – there was a risk of— so-called risk of lead poisoning from the paint. It turned out to be bogus. It didn’t matter. They did a global recall. Three years later, 2010, they had record sales. They passed a billion pounds because parents knew that even if the risk was infinitesimal, Thomas the Tank Engine manufacturer would—

SUSAN Let’s hope it plays so well for Fonterra.

BRYCE But it’s not going to, because Fonterra is perceived as being a company that’s focused on getting super profits for farmers and not worried about those longer-term issues. I think there’s a culture problem in Fonterra.

MATTHEW And that needs to be investigated by the Prime Minister.

SUSAN I think it will be. All right, thank you, panel.

ENDS

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