Fonterra to plead guilty on eve of China visit

HAMISH RUTHERFORD AND HARRY PEARL
Last updated 05:00 14/03/2014

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Days ahead of a bridge-building exercise by Prime Minister John Key in China, Fonterra said it would plead guilty to a series of charges stemming from a global food safety scare it sparked last year.

The Ministry for Primary Industries said yesterday it had laid four charges in the Wellington District Court against New Zealand's largest company, under the Animal Products Act, for failing to ensure the quality of exports or to inform the regulator when there were signs of trouble.

Fonterra immediately announced it had entered guilty pleas, with spokeswoman Maury Leyland saying the charges simply reflected the failings exposed by its own internal review.

"We expect to be held accountable where there are gaps in what we do."

Fonterra faces a fine of up to $500,000.

Last night, news of the charges and guilty plea prompted a mixed reaction from Waikato farmers.

Otorohanga farmer Colin Murphy said he thought it was a political manoeuvre to appease overseas buyers.

"There's not a lot we can do about it and the Government needs to take something to the Chinese authorities.

"They have to show they are in control," Mr Murphy said.

Te Awamutu farmer Bruce Rowe also said the timing of the announcement was a little suspect.

"But the big picture is I think the thing was handled very badly from day one and we haven't seen the end of it."

The charges relate to an incident in August when there were fears bacteria which cause botulism were in whey powder concentrate products manufactured many months earlier. The concentrate is commonly used in infant formula.

It sparked a worldwide product recall, complicated by the fact that Fonterra struggled to establish where the 38 tonnes of ingredients had ended up.

A number of countries suspended New Zealand imports, the Government's food safety mechanisms were mocked in Chinese state media and Fonterra executives were hauled to Parliament as ministers said openly they were struggling to trust what the company was saying.

Eventually the event turned out to be a false alarm but the Government has since gone to considerable lengths to try to reassure markets, especially China, that food safety standards are up to scratch.

An independent inquiry found that New Zealand's food safety system was up to international standards.

But Mr Key is making good a pledge he made at the time to travel to China to explain the findings. 

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- Fairfax Media

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