Fonterra job cuts could bite deeper

23:37, Jul 24 2014
CANPAC: One-third of the jobs at Fonterra's packaging facility in Hamilton would go by September in response to falling volumes.

Canpac's remaining 220 workers could be on borrowed time, after Fonterra refused to offer any assurances over the future of the business.

The dairy co-operative announced on Wednesday that one-third of the jobs at its packaging facility in Hamilton would go by September in response to falling volumes.

It said there were a range of reasons for the tumble in production, including changing conditions in China, cheaper production overseas, and the fallout from a series of food safety scares.

Dairy Workers Union national secretary Chris Flatt, representing 80 members who may lose their jobs, said on Wednesday he had been aware of Canpac's dropping volumes over the past year, but the details were "a bit of a shock".

He said there were "big changes in the industry" and he was surprised the announcement wasn't that Fonterra planned to "shut it down . . . and if we need to, reopen it."

"My biggest fear was that 330 jobs would be going, not just 114," he said.


Fonterra National director New Zealand operations Robert Spurway refused to respond to questions over how secure the remaining 220 jobs were - despite saying his focus was on offering certainty to staff.

He instead sent through a media statement reiterating the message Fonterra offered after the Wednesday announcement.

"We have completed a comprehensive review at Canpac and the proposed changes mean the site will operate more efficiently and aligns the operation to Fonterra's paediatric strategy," it read.

"We have taken our people through all the detail of our proposal and our focus is on supporting the Canpac team through the consultation process.

"Yesterday's announcement provides clarity on our plans at Canpac and sets the platform for future growth at the site."

Fonterra is facing increased competition from overseas businesses setting up shop in New Zealand, as well as competition from suppliers such as the United States in our biggest market, China.

Waikato Federated Farmers dairy chairman and Fonterra supplier Craig Littin said the issue highlighted how careful Fonterra needed to be on food security.

"I would hope that they learned lessons from the botulism scare."

However, Te Awamutu supplier Bruce Rowe said he was watching the developments "with a very, very wary eye".

"It's a warning signal and it's not a great omen to look at," he said.

Reading between the lines, he thought the payout may not be as rosy as what many dairy farmers expected.

Waikato Times