Here we go again, a new year and a new contamination scare
for Fonterra, writes Liam Dann, New Zealand Herald
Hopes that it had put its food safety troubles behind it have
been dashed right on the eve of a court battle with French
rival Danone which is seeking compensation for damage done to
its brand during last year's crisis.
We need to keep this latest issue with E.coli in perspective
of course - 9000 bottles of cream is a drop in the ocean of
dairy products Fonterra produces every day. Also, and
crucially, this is not an export issue but a domestic one.
Fonterra Brands New Zealand is effectively a different
business to the massive milk powder-producing operation at
the centre of last year's false alarm around botulism
A specific localised event such as this latest one is also
far less significant for the whole industry than the
controversy about DCD fertiliser residues which upset Chinese
importers this time last year.
While the science confirmed that DCD levels detected in dairy
product were within safe limits for human consumption, the
issue was so broad that it hung heavily over the entire dairy
In fact were it not for Fonterra's troubles last year this
latest issue would be minor, but in the high stakes
international dairy trade consumer perceptions are king.
Globally Fonterra's relatively anonymous status as a
wholesaler of dairy ingredients has thus far shielded it from
any serious commercial damage. But as these issues continue
to make headlines in foreign media Fonterra's name
recognition is no doubt growing - and for the wrong reasons.
Already the E.coli recall has been picked up Reuters and
Bloomberg and made headlines on The Wall Street Journal and
Singapore Straits Times websites.
It will not go unnoticed in China.
The events of last year have left the company highly exposed
and the Catch 22 is that with greater vigilance the company
is more likely to identify issues, however minor, and under
more pressure to go public with them.
If it has really learned its lessons from the botulism fiasco
then it will have processes in place to manage consumer
fallout and should in time shake off any perception issues
about its food safety record.
But this recall won't help and the world will be watching.