Govt to discuss terms of MPI probe into Fonterra food scare on Monday

Friday 9th August 2013

New Zealand government ministers will discuss the terms of a Ministry for Primary Industries inquiry into the Fonterra Cooperative Group food scare on Monday after officials work through the weekend to nut out the details.

Primary Industries Minister Nathan Guy told reporters in Wellington there will be a "broad discussion" on the investigation, and while the terms of reference haven't been "nailed down" it could include the country's food safety monitoring regime.

"We've produced food here for over 120 years successfully, we've got world leading food safety systems - that's part of the reason why we want to go back through this investigation," Guy said. "I'm working with MPI officials over the weekend to allow ministers to have some comments on how the investigation may take shape."

Fonterra chief executive Theo Spierings, chairman John Wilson and members of the dairy company's executive team met with government ministers today to give an update on their own two investigations into the food scare, in what Guy called a "free and frank discussion."

The dairy company has introduced a tougher testing regime as it looks into what caused the contamination, and its board is holding a separate inquiry led by its independent directors, referred to as appointed directors, John Waller, Ralph Norris, David Jackson and Simon Israel.

The potential food taint scare was sparked on Saturday when Fonterra said some of its whey protein concentrate product may have been contaminated by bacteria which can cause botulism.

In reference to the perceived delays between Fonterra discovering the bacteria and notifying government officials, Guy said ministers have "some concerns in particular to do with the timeline."

Chief executive Spierings told a media briefing yesterday the dairy exporter hadn't seen any sign of customers reducing their business as a result of the food taint scare, and that it was too early to consider whether Fonterra will have to take a charge against its earnings.

Units in the Fonterra Shareholders' Fund, which gives outside investors access to the dairy company's dividend stream, rose 1.6 percent to $7.20 today, recovering all of its losses since the scare emerged.

BusinessDesk.co.nz

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