FONTERRA FOOD FIGHT

Ronald Reagan once said, "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"  Māori smiled knowingly when he said it.  But there’ll be little for New Zealand farmers to smile about in the coming months, as the National led government ‘helps’ clean up Fonterra.

As our biggest company with annual revenues of almost $20 billion, Fonterra generates 25 per cent of New Zealand's export earnings, but scandals with Melamine, DCD, and Clostridium, have left its brand name in tatters.  Now government advisors have been sent in and there are even calls for a parliamentary investigation into Fonterra’s handling of the crisis. 

 

Fingers are already being pointed at Fonterra Chairman John Wilson, who has been largely silent.  Pundits are saying that the composition of the Fonterra board is part of the problem.  With nine of the thirteen directors elected from among the farmer shareholders, it is being said there is not enough expertise to guide the company.   But farmers know that the only thing keeping the co-operative model in place is the composition of the board, and a shift to a majority of outside directors will end both the co-op and their control over their product.

Enter the government in the form of Prime Minister John Key who says it is "very, very odd" Fonterra allowed production of infant formula to continue after finding Clostridium in its product in March.  But what is even odder is that the government has cast this solely as an issue of food safety which, though an important issue in itself, is but a pawn in the global war over food sovereignty.

This week the government is closing public submissions for Food Bill 160-2.  This bill met huge opposition when first introduced in 2010.  It’s the backbone to the Trans Pacific Partnership Agreement (TPPA), currently being negotiated in secret.  Written by the Parliamentary Counsel Office (PCO) between 2008 and 2010; the same time the TPPA and Natural Health Products Bill were written, this Bill strengthens the global trading platform with harmonized standards and regulations that are able to over-ride local standards and regulations. Amidst warnings that it will end New Zealand’s food sovereignty, the Green Party has amassed 42,000 signatures against it. 

Back to Fonterra and its woes.  The current CEO, Theo Spierings, used to lead the Dutch farmer co-op, Friesland Foods.  In 2008 two things happened under his management.  First, testing by the Agri-Food and Veterinary Authority of Singapore found Friesland Food’s "Dutch Lady" brand of strawberry-flavoured milk manufactured in China was contaminated with melamine. Second, Friesland Foods merged with Campina, effectively ending farmer ownership and control of it.   

Yet it seems that Theo Spierings will survive the aftermath of this latest scandal while Fonterra, faced with an internal inquiry lead by Ralph Norris, one of its non-farmer Directors, is unlikely to survive as a farmer owned co-op.  And to add to its woes, the government says it’s here to help.