Fonterra boss on the resignation question; the new DCD scare in Sri Lanka; the financial cost of the botulism scare - and the question "Why is our Prime Minister changing his schedule to go to China to do the job that you should have done?"
‘Consumer perception in China at the moment is stable," Fonterra CEO Theo Spierings told TVNZ's Q+A today, adding "Of course, there’s always, always a dent after such a week, and we have to repair it."
Earlier on the same show Prime Minister John Key said "‘The issue is what consumers think,’ and we don’t know what they think yet."
Mr Spierings' said, "We do know what they think, because we follow social media all the time. I have an updated report of social media in China yesterday, and authorities are backing us up by saying, ‘They did the right thing'." A snappish exchange followed with interviewer Susan Wood
Wood: So if there is no problem in China, which is what you’re trying to tell me, why is the Prime Minister of New Zealand changing his schedule to go to China to reassure the Chinese people and the Chinese government?
Spierings: Look, I went to China myself as well—
Wood: No, no, answer the question. Why is our Prime Minister changing his schedule to go to China to do the job that you should have done?
Spierings: I think for the same reasons as I went to China – to have the conversation constant and open with local authorities. I went for customers and consumers. And I’m not saying nothing happened. I’m saying that the situation in China at this moment is stable, and people are saying, ‘They did the right thing.’ Of course, mistakes have been made. There will be a review. There will be an operational review from me. There will be a review from an independent committee of the board. There will be questions from ministers. I think there will be similar—
Wood: So is the Prime Minister wasting him time? Is the Prime Minister wasting his time going to China?
Spierings: No. No, no ... Because the relationship between New Zealand and China is so strong – so strong – and I think it’s a very good call of the Prime Minister to go, because it’s really about relationships and about having the facts on the table. There’s a whole lot of subjectivity here.
The Fonterra CEO said the financial cost of the botulism scare would run into "tens of millions."
Fonterra is also reeling from fallout from the botulism scare with news that Sri Lanka has ordered the company to recall 40 tonnes of milk powder alleging it contains residue of the farm chemical DCD.
It has also banned Fonterra from advertising around the Anchor brand in Sri Lanka until further notice.
Mr Spierings says its tests prove its products in Sri Lanka are DCD free.
“We’re talking about 40 tons, so it is, in terms of volume, it’s not that significant. But at the same time, they’ve also told us that advertising around the brand is not allowed," Mr Spierings said.
"And in Sri Lanka, there’s always tension in the market because it’s price controlled by the government, and dairy prices are at the high level. They want to support fresh farming, so there’s always some tension there. And I think with all the noise of this last week, people are connecting the dots, and that’s why this is happening. And we are definitely fighting it, because we have clear certificates – DCD-free, stamped, when it was exported, when it was imported – all clear.”
Asked if it was a perception problem, Mr Spierings said, "There’s a whole lot of subjectivity and anxiety around the situation, and that’s why we’re saying we’re going back to the (Sri Lankan) government."
The allegation was "strange and unfair," he said.
But the Fonterra CEO said he hasn’t considered resigning this week.
Meanwhile, political commentator Matthew Hooton told Q+A he does not trust the company to investigate itself.
“I think he does need to have a very thorough investigation with the power to compel witnesses. I think it needs to be very, very tough. Fonterra and the dairy industry in New Zealand are masters of the cover-up. You go back to the EU Customs case, you go to Powdergate, you go to Iraq thing, and there is no way that you can trust that company to investigate itself,“ Mr Hooton said.
“We need someone like Michael Stiassny, backed up by Professor Gluckman, backed up by a Supreme Court Judge to go in there with the power to compel and get to the bottom of it. And it’s not about a dirty pipe; it’s about the culture of that company. They do not seem to understand that in the food business safety scares happen, they happen often, and they have to be managed. Nestle has a product recall somewhere in the world pretty much at any given time. Yet in this particular company, they just don’t seem to know how to deal with these inevitable problems that will always come up.”
On social media, Mr Hooton offered further analysis of Mr Spierings Q+A appearance, tweeting, "Is this the worst interview any senior CEO has ever done?"
