Fonterra says no signs yet of loss of business, too soon to count cost

Fonterra Cooperative Group hasn’t seen any signs of customers reducing their business and says it is too soon to say whether the costs of dealing with the contamination will result in a charge against earnings.

Chief executive Theo Spierings told a conference call today that with listed units on the NZX, Fonterra has obligations to disclose any significant financial impact. Major customers hadn’t signalled as yet any change in demand, he said.

On the conference call chairman John Wilson fronted the media for the first time since the crisis emerged last weekend and defended why it took him this long to appear in public on the issue, saying “in reality this is an operational matter” and he had faith in Spierings’ management team to handle it.

The board of Fonterra will be conducting its own investigation into the contamination, led by its independent directors with outside assistance, Wilson said. Terms of reference haven’t yet been finalised.

The contamination was confined to 38 metric tonnes of whey protein concentrate (WPC80) manufactured at Fonterra’s Hautapu plant near Cambridge and first picked up at a plant in Australia. It was used in the manufacture of infant formula, juice and dairy beverages, yoghurt, body building powder, and animal stock food.