Mixed views on disclosure delay

Fonterra says major investors and market analysts are comfortable with its decision to keep its investigation into trace contaminants under wraps initially.

However, analysts and investors spoken to by Fairfax were divided over whether the dairy giant was transparent enough, with one saying "it was not a good look". Another analyst said Fonterra was tardy with its disclosure.

Last week, Ravensdown withdrew a product used on some Kiwi dairy farms to stop nitrate from fertiliser leaching into waterways because Fonterra had found minute traces of it in some of its milk.

Those traces of dicyanidiamide (DCD) - well below harmful levels - were found back in September but it took four months for the findings to be announced.

In that time a working group on the subject was formed between Fonterra, the Ministry of Primary Industries and the dairy industry. Also in that time, Fonterra listed its Shareholder Fund units on the NZX.

"The clear message coming back from the markets is that they understand the issue and appreciate that there is no food safety issue here," Fonterra spokesman Graeme McMillan said.

An investment fund manager, who did not wish to be named, said striking the balance between keeping investors informed and keeping a company's business shrouded from competitors was difficult. His fund was comfortable with Fonterra's decision, he said.

However, an unnamed researcher at a large brokerage said there were questions about the timing of the announcement. "Absolutely, it's not a good look," the researcher said. Fairfax NZ

Taranaki Daily News