Sue Kedgley: Another food scare, another crisis

Fonterra's knee-jerk tendency to play down food safety issues that could harm our dairy industry is unnerving. Photo / Greg Bowker

Fallout from melamine debacle should have motivated Fonterra to deal with DCD scare quickly and openly.

It's always interesting to see how corporations and governments respond to a food safety crisis.

There's invariably a temptation to cover up, procrastinate, deny or downplay a food safety risk because of its potential to scare off consumers and international trading partners.

This is especially the case when the food safety scare involves New Zealand milk, our major export commodity which earns us around $11 billion a year.

But invariably, any attempt to cover-up a food safety scare backfires and ends up escalating, rather than defusing, a crisis. It also undermines consumer confidence in the safety of food, and their trust in the integrity and independence of food safety authorities.

Fonterra and the Chinese Government learned this to their cost when they failed to immediately inform the public about their discovery that baby milk being sold in China by Fonterra's joint venture company was contaminated with a poisonous substance, melamine.

As a result, thousands of Chinese babies suffered from serious kidney damage - and six babies died.

Fonterra claims it immediately informed local Chinese authorities about the contamination, and sought a mandatory recall of the contaminated infant formula. But the Chinese Government decided to keep quiet about it until after the Olympic Games, and Fonterra went along with this. The effect of the long delay in going public and issuing a mandatory recall was to elevate the food safety scare into a global scandal, and to undermine consumer confidence in the safety of food.

You would have thought Fonterra would have learned from its involvement in the melamine scandal, and figured out that the only way to handle any future food safety scandal is to be absolutely open, honest and upfront with consumers - and its trading partners.

So it's astonishing that Fonterra, and the Government, chose to remain silent for four months following the discovery that some New Zealand milk was contaminated with dicyandiamide (DCD).

Instead of informing consumers and our trading partners as soon as test results had been confirmed, they set up a working party comprised of representatives with a vested interest in the issue - the dairy industry and the fertiliser companies who manufacture the product - to develop a public relation strategy to downplay and "manage" the issue.

The working group met five times in December and January, and the Ministry of Primary Industries finally issued a press release last week, four months after the discovery was first made.

Fonterra has come up with various excuses to explain why it remained silent for four months. The main one is that since DCD does not pose a food safety risk, there was no need to inform consumers or our trading partners.

This is an arrogant and feeble excuse which was bound to backfire. Just because our Government decided it didn't pose a food safety risk, did not mean that consumers and other governments would see it that way. And indeed, the Chinese Government has not accepted our Government's blandishments, has launched its own investigation and is randomly testing New Zealand milk powder to ensure it's not contaminated. Even if it is confirmed that DCD doesn't pose any food safety risk, it is still a toxic substance that isn't approved for use in our food supply, or the food supply of most of our trading partners, and is not supposed to be present in milk.

It is therefore a contaminant that's illegal in our food supply - and in the food supply of any of our trading partners that have not approved its use. Consumers and trading partners, therefore, have a right to know if residues of this illegal contaminant are found in milk.

It's concerning that Fonterra and the Government chose, once again, to remain silent for many months. It suggests they have learned nothing from previous food safety scandals, and that their knee-jerk, almost instinctive response to a food safety issue is still to play for time and downplay any risk that could damage our reputation overseas.

Their strategy was always going to fail, and inflame rather than defuse the concerns of consumers and trading partners. As one dairy insider put it this week, "just a sniff of a cover-up and you're gone." Their foot-dragging has resulted in claims they were seeking to cover it up or delay releasing it until after the launch of their shareholder fund last November, and Fonterra is now in full damage control mode.

Their slow response has also fuelled media speculation overseas, contributed to the concerns of some of our trading partners, and resulted in some of our exporters losing tens of billions of dollars.

So let's hope that when Fonterra and the Government reflect on their handling of this latest crisis, they decide that it's far better to defuse a food safety crisis quickly by being open and upfront with consumers and trading partners as soon as possible, rather than seeking to delay, downplay or cover up any potential food safety scandal.

Sue Kedgley is a former Green MP.