Fonterra
Fonterra Co-operative Group Limited /ˈfɒntɛrə/ is a New Zealand multinational publicly traded dairy co-operative owned by around 10,500 New Zealand farmers.[3] The company is responsible for approximately 30% of the world's dairy exports[4] and with revenue exceeding NZ$17.2 billion,[5] is New Zealand's largest company.
![]() | |
Type | Publicly listed cooperative |
---|---|
Industry | Manufacturing, retail |
Founded | 16 October 2001[1] |
Headquarters | , |
Area served | Worldwide |
Products | Milk, butter, cheese, ice-cream |
Revenue | ![]() |
![]() | |
![]() | |
Total assets | ![]() |
Total equity | ![]() |
Number of employees | 21,400[2] |
Subsidiaries | Anchor, Anmum, Anlene, Mainland Cheese, Soprole |
Website | fonterra.com |
Fonterra was established in October 2001 following the merger of the country's two largest dairy co-operatives, New Zealand Dairy Group and Kiwi Cooperative Dairies, with the New Zealand Dairy Board. The name Fonterra comes from Latin fons de terra, meaning "spring from the land".[6]
History
![](../I/Fonterra_Facility_Near_Hamilton.jpg.webp)
In New Zealand, as in most Western countries, dairy co-operatives have long been the main organisational structure in the industry. The first dairy co-operative was established in Otago in 1871. By 1920, there were 600 dairy processing factories of which about 85% were owned by co-operatives.[7] In the 1930s there were around 500 co-operatives[8] but after World War II, improved transportation, processing technologies and energy systems led to a trend of consolidation, where the co-operatives merged and became larger and fewer in number.[9] By the end of the 1990s, there were only four co-operatives nationwide: the Waikato-based New Zealand Dairy Group, the Taranaki-based Kiwi Co-operative Dairies, Westland Milk Products, and Tatua Co-operative Dairy Company.[7]
Fonterra was formed in 2001 from the merger of the two largest co-operatives, New Zealand Dairy Group and Kiwi Co-operative Dairies, together with the New Zealand Dairy Board, which had been the marketing and export agent for all the co-operatives.[10] Fonterra effectively has monopsony control of the New Zealand domestic and export dairy industry.[11] The merger was initially turned down by the New Zealand Commerce Commission, but later approved by the New Zealand Government,[12][13] with subsequent legislation deregulating the dairy industry, allowing for the export of dairy products to be undertaken by any company. The two smaller co-operatives, Tatua and Westland, did not join Fonterra, preferring to remain independent.
The company has an annual turnover of around NZ$17 billion.[14] Its core business consists of exporting dairy products under the NZMP brand (95% of its New Zealand production is exported). It also operates a fast-moving consumer goods business for dairy products, Fonterra Brands. Fonterra has a number of subsidiaries and joint-venture companies operating in markets around the world.
![](../I/Riverina_Fresh.jpg.webp)
In 2005, the company purchased a large factory in Dennington, Victoria, Australia, from Nestlé, after they moved out of the collection of milk from farmers and the manufacture of powdered milk in Australia.[15] Also in 2005 the company made moves towards purchasing Australian companies Dairy Farmers and National Foods. It also converted its 50 per cent stake in Victoria dairy producer Bonlac to full ownership. At this time $1 billion of Fonterra's revenue was from Australian sales, which was 14 per cent of the dairy products it sells around the world.[16]
In June 2008, the company acquired the yoghurt and dairy dessert business of Nestlé Australia,[15] which it on-sold to Parmalat Australia in December 2015.[17]
In 2010, US embassy cables leaked by WikiLeaks suggested New Zealand had only sent troops to Iraq in 2003, following the initial invasion, so Fonterra would keep valuable Oil for Food contracts.[18][19]
In 2019, the Tip Top ice cream brand was sold for NZ$380 million to Froneri, a global joint venture between Nestlé and PAI Partners.[20][21][22]
In September 2019, Fonterra agreed to sell its 50% stake in DFE Pharma for NZ$633 million ($400.37 million).[23][24]
Governance
John Roadley was the inaugural chairman of Fonterra's board. He foreshadowed his resignation in August 2002 and was succeeded, after the next annual general meeting, by Henry van der Heyden.[25] Van der Heyden held the chairmanship until December 2012.[26] John Wilson succeeded van der Heyden and announced his resignation in July 2018 due to illness (he died in January 2019 aged 54).[27] John Monaghan succeeded Wilson.[28] He is the current chairperson and in March 2020, he foreshadowed that he would step down in November 2020.[29] In June 2020, Peter McBride was announced as Monaghan's successor.[30]
Name | Portrait | Start | End |
---|---|---|---|
John Roadley | ![]() |
October 2001 | September 2002 |
Henry van der Heyden | ![]() |
September 2002 | December 2012 |
John Wilson | December 2012 | July 2018 | |
John Monaghan | July 2018 | November 2020 | |
Peter McBride | November 2020 (incoming) | ||
Changes to capital structure
In November 2007, the board of directors announced[31] a two-year consultation programme regarding their preferred capital re-structuring option: putting the business operations in a separate listed company, with the co-operative maintaining a controlling interest. The aim was to give more access to funds for global growth.
Praised by some[32][33] as a bold move which would allow better access to outside capital, the proposals encountered significant opposition from both farmer shareholders and the government (who would be required to pass enabling legislation). Despite including a range of safeguards, farmers were clearly concerned at the risk of losing control; in what was sometimes described as a demutualization.
The board responded in 2008 by shelving the November 2007 proposal and continuing consultation and discussion with farmer shareholders. In September 2009, the board announced a three-step process to revamp Fonterra's capital structure.[34] The new approach abandoned thoughts of a public listing of Fonterra shares and retained 100% farmer control and ownership of the co-operative.
A key goal of the capital structure changes was to stop large amounts of money washing in and out of Fonterra's balance sheet each year as milk production fluctuates.[35] Under the previous structure, farmers matched their shareholding with their milk production by owning one co-operative share for each kilogram of milksolids (kgMS) produced annually.[36] If their milk production dropped in any season, they could redeem shares back to the co-operative, which was required to buy the shares back off them. Consequently, Fonterra faced the risk of losing large amounts of share capital through redemptions during times of declining milk production.[37] For instance, after milk production fell during the 2007/08 drought, Fonterra had to pay out $742 million of share capital to farmers via redemptions.[36]
The capital structure changes also sought to provide greater incentives for farmers to increase their investment in Fonterra shares, helping ensure Fonterra has sufficient share capital to fund profitable business opportunities and drive a higher payout to dairy farmers.[38]
The first two steps of capital structure change received good support from farmer shareholders at Fonterra's annual meeting in November 2009.[39] The first step allowed farmers to hold shares above their level of annual milk production; farmers could now own an additional 20% of "dry" shares (i.e. up to a maximum of 1.2 shares per kgMS).[40] There were also enhanced incentives for farmers to hold shares even if their production falls. The rules about the pricing of end of season share transactions were also tidied up.
The second step changed the way Fonterra shares were valued to reflect that share ownership is restricted to farmers only. Previously, Fonterra shares were valued on a theoretical basis as if the shares were freely traded like a public share.[36] An independent valuer subsequently assessed that the restricted market value should be at a 25% discount to the freely traded value.[41]
The third step, titled "Trading Among Farmers", involves more far-reaching change to Fonterra's capital structure. The co-operative would no longer be obliged to issue or redeem shares at a price established via an independent valuation process. Instead, farmers would buy or sell shares among themselves at market prices through a farmer-only share trading market. This would have the effect of making Fonterra shares permanent capital, providing the co-operative with more confidence to invest in long-term projects without fear that some of its share capital might be needed to fund redemptions in future years.[42]
As part of the changes, farmers would have greater flexibility with their Fonterra shareholding. The maximum shareholding would be 2 times production (up from the 1.2 times approved in step one) and farmers would have up to three years to comply with shareholding rules when entering/exiting the co-operative or increasing/decreasing their milk production.[37]
Additionally, Fonterra would set up a special fund that would financially help farmers purchase shares (or retain shares they would otherwise have to sell). The fund would pay farmers for the right to receive dividends and the gain/loss from any changes in value of some of their shares, but the farmer would still be the owner of the shares.[37] The fund would raise the money it needed to pay farmer shareholders by selling investment units to investors.[43] Fonterra would require the fund to target "friendly" investors such as sharemilkers, retired farmers and offshore Fonterra suppliers, although the public and institutions would also be able to participate.[43]
The "Trading Among Farmers" proposal went before a special meeting on 30 June 2010 and received 89% support from farmer shareholders voting, easily exceeding the 75% threshold required for a favourable vote.[44]
Court case Fonterra Vs Bega Cheese
Fonterra market and distribute the Bega Cheese brand, under an agreement established between the two companies in 1999. Fonterra later raised the issue of Bega otherwise using the Bega brand to market Peanut Butter. Bega themselves have since challenged this, accusing Fonterra of not living up to the agreement, by not promoting the brand and therefore devaluing it. The case was ongoing in 2020.[45]
Brands
![](../I/Fonterra_milk_powder_factory_in_Heerenveen%252C_The_Netherlands.jpg.webp)
New Zealand
- Anchor (milk, cream, butter)
- Anchor CalciYum (flavoured milk, custard yoghurt, ice cream)
- Anchor Greek Yoghurt
- Anchor Uno (Kids yoghurt)
- Anmum
- Country Goodness (butter-margarine blend spread, cultured sour cream dips)
- De Winkel (yoghurt)
- Fresh 'n Fruity (yoghurt)
- Galaxy (specialty cheese)
- Kapiti (ice cream, specialty cheese)
- Mainland (cheese, butter)
- Mammoth Supply Co. (flavoured milk)
- Perfect Italiano (Italian cheese)
- Primo (flavoured milk)
- Symbio Probalance (probiotic yoghurt)
- Tip Top (ice cream) – Sold to Froneri in 2019[20]
Australia
- Bonlac[46]
- Anchor CalciYum
- Anchor (Milk and Cream)
- Mainland (Cheese & Butter)
- Mammoth Energy
- Munchables
- Perfect Italiano
- Western Star (butter)[47]
Chile
- Soprole (dairy products)
Business units and subsidiaries
- Fonterra Brands – consumer goods business
- NZMP Ingredients – global ingredients business
- Fonterra Global Dairy Trade – dairy ingredients supplier to the globally traded market
- Anchor Food Professionals – foodservices supplies
- Fonterra Group Manufacturing – food processing and manufacturing operations
- Fonterra Milk Supply – collection and distribution of milk from farms
- Shared Services – finance, communications, M&D, human resources, strategy and information services
- RD1 – a wholly owned rural retail supplier. RD1 was formed at the end of 2001 through the merger of RD1.com and the Town & Country Agri-centres, Fonterra's two rural supply companies. With revenue exceeding $900 million, RD1 is New Zealand's largest retailer of agricultural supplies to dairy farmers. It operates in over 60 stores throughout New Zealand. In 2014, Farm Source was launched as a new brand platform for RD 1, which provided additional benefits including Farm Source Rewards and exclusive prices for Fonterra farmer suppliers. There are 68 Farm Source stores across New Zealand.
Environmental performance
Initiatives
Dairying stock entering waterways due to lack of fencing and poor use of fertilisers are major contributors to water pollution in New Zealand.[48] Fonterra's environmental policy states that "Fonterra shall demonstrate a global commitment to protecting the environment. Sustainability, good environmental practice and environmental improvement are cornerstones of Fonterra’s environmental commitment."[49] Fonterra claims to have a number of initiatives such as the Dairying and Clean Streams Accord, relating to environmental protection to achieve this policy. In December 2011, the Green Party questioned Fonterra's credibility and the effectiveness of the self-auditing approach given the wide discrepancy between Fonterra's claims and an independent audit of Dairying and Clean Streams Accord.[50]
In 2003, Fonterra became a signatory to the Dairying and Clean Streams Accord, which sets a timeframe for the improvement of water quality on farms. Progress on the Accord goals is reported by the signatories in March of each year on the basis of data collected by Fonterra. The integrity of this data was later questioned when a 2012 independent report commissioned by MAF indicated that while Fonterra's survey of farmers suggests that nationally 84% of properties have stock excluded from waterways, an independent audit by MAF revealed a position that only 42% of farms nationally had stock exclusion.[51] The difference in Fonterra's results against those in an independent audit suggest further work is required by Fonterra to protect streams and that evaluating success in this area may be better carried out by an independent third party auditor.
In July 2007, the Green Party called on Fonterra to use financial penalties on its suppliers who were "dirty dairying", and to particularly penalise the 'recidivist polluters' the Crafar Farms.[52] In 2010, Fonterra launched its every farm every year initiative. Fonterra plans to check every farm's effluent management infrastructure every year in a move to address non-compliance with regional council dairy effluent rules.[53] The 2012 independent audit spurred further progress in this area with Fonterra announcing that suppliers will be required to complete fencing of Accord waterways by June 2013.[54] Whether this will occur is yet to be seen.
In February 2008, the inaugural Fonterra Environmentalist of the Year was announced at the Beehive.[55] The Award continues a partnership between Keep New Zealand Beautiful and Fonterra. Fonterra is also a Corporate Sponsor of the Society and each year teams of staff from the company's manufacturing sites participate in the Keep New Zealand Beautiful Clean Up Week campaign, clearing rubbish from around roadsides, sports fields, parks and beaches. These activities have been criticised as token however as they have limited impacts on preventing stock from entering waterways and in assisting farmer to implement more effective fertiliser regimes that could cut farmers costs and improve water quality.[53]
In March 2013 Fonterra unveiled a new type of opaque milk container it called a "game-changer", claiming it would keep milk tasting fresh for up to two weeks after opening.[56]
Awards
In 2007, Fonterra won two awards in the Energy Efficiency and Conservation Authority, Energywise Awards:
- Transpower Project Innovation Award; Winner: Fonterra Co-operative Group – Whareroa heat recovery loop
- Contact Energy Management Award; Winner: Fonterra Co-operative Group – Energy efficient project management team[57] Fonterra was also commended for its road to rail project by the EECA.[57]
In 2008, Fonterra Edendale won the New Zealand Clean Air Society's annual Clean Air award, which recognises exceptional contributions by individuals and businesses to researching and improving the environment.[58]
In 2009, Fonterra won the supreme prize at the Packaging Council of New Zealand's Environmental Packaging Awards for its introduction and promotion of a more environmentally sustainable packaging.[59]
In 2012 Fonterra won the Export Category at the 2012 TVNZ New Zealand Marketing Awards for their Anchor Strong marketing to the Pacific, with designs by Dow Design.[60]
Biofuels
Fonterra is New Zealand's largest producer of biofuel, processing a waste stream from casein manufacture into bio-ethanol. The company produces around 20 million litres of premium ethanol annually.[61]
Since 2004, Fonterra has produced ethanol from whey, a by-product of casein, in the Edgecumbe, Tirau and Reporoa plants. That year Fonterra's Edgecumbe plant showcased the power of its biogas, operating a 1.8-litre Hyundai vehicle on a petrol mixture containing 10 percent ethanol.[62] In 2008, Fonterra began supplying Gull Petroleum with ethanol from its Edgecumbe plant.[63]
The fuel has significant environmental benefits. It is renewable, biodegradable, and, by reducing the amount of fossil fuel in use, could help the campaign to cut greenhouse gas emissions.[61] Every five million litres of ethanol used in biofuels saves more than 7,000 tonnes of carbon from entering the earth's atmosphere.[64]
In July 2016, Fonterra announced that their tanker fleet was switching to ZBioD (Z Energy's biodiesel fuel) as a foundation customer. Chief Operating Officer Global Operations, Robert Spurway said "the move to biodiesel has the potential to reduce emissions for the tankers using it up to four per cent each year, and the partnership is an important milestone for Fonterra."[65]
Manawatu River waste water
In 2006, Forest and Bird asked Fonterra to 'clean up its act', instead of obtaining consent to continue to discharge 8,500 cubic metres per day of wastewater into the Manawatu River.[66] Fonterra responded to Forest and Bird's request, agreeing to treat wastewater it discharges into the Manawatu River, greatly reducing its impact on the river. Treatment will be phased in so that by 2015 the discharge will be treated to a level where the water will be fit to swim in year-round.[64]
In 2010, Fonterra signed a voluntary agreement with local councils and freezing works to clean up the river.[67] Fonterra has since encouraged its farmers to clean up their waste and plant trees alongside waterways.[68]
Deforestation allegations
In August 2009, Greenpeace claimed that Fonterra was implicated in the destruction of Indonesian and Malaysian rainforests, causing deaths of orangutans and increased global greenhouse gas emissions. In response, Federated Farmers said the use of palm kernel does not cause the destruction of tropical forests as it is a waste by-product with almost no commercial value. A spokesperson John Hartnell stated that "Not one millimetre of forest is being cleared just to feed dairy cows".[69]
Fonterra says it shares community concern about tropical deforestation, "which in some cases has been driven by the establishment of palm oil plantations". Fonterra says it has been proactive in ensuring a sustainable supply of palm kernel "and ensuring we do not support deforestation, directly or indirectly."[70]
Fonterra is a member of the Roundtable for Sustainable Palm Oil to ensure it was informed or sustainability issues in South-East Asia and "to actively contribute to more robust sustainability certification systems."[70]
Fonterra was also the subject of Greenpeace Aotearoa New Zealand protests off the Port of Tauranga on 16 September 2009 and Port Taranaki on 5 February 2011, where Greenpeace activists invaded ships carrying palm kernel animal feed, destined for dairy farms.
Palm kernel imports went from 0.4 tonnes in 1999 to 455,000 tonnes in 2007 and then to 1.1 million tonnes in 2008,[71] one quarter of the world's palm-based animal feed.[72] Greenpeace says that deforestation for the production of palm products is a significant cause of climate change, and loss of bio-diversity.[73]
Greenpeace campaign director Chris Harris said only 4 per cent of palm oil came from sustainable sites.[74] Greenpeace stated that forests were being cleared for the planting of the trees that produce palm oil.
In August 2016, Fonterra announced a new palm products sourcing standard that was developed in consultation with key supply partners, and following discussions with Greenpeace that began in December 2015. "The new standard requires Fonterra to purchase on segregated supply palm oil by 2018, and to work with suppliers of palm products to ensure that plans are in place for full traceability to plantation by 2018", said Fonterra's director of social responsibility, Carolyn Mortland.[75]
Lignite coal use protest
On 17 November 2009, Greenpeace members protested at Solid Energy's New Vale opencast lignite mine near Gore, New Zealand, by unfurling a 40 by 40-metre banner reading 'Fonterra Climate Crime'. Greenpeace was protesting about Fonterra's use of brown coal (lignite) at the nearby Edendale Fonterra plant. Greenpeace alleged that the Edendale plant will burn 179,000 tonnes of lignite, which will release over 250,000 tonnes of carbon emissions.[76][77]
In response to the protest, Fonterra said, "We use 13.9 percent less energy to produce each tonne of export product than we did in 2003. That’s equivalent to the energy required to power 100,000 homes and, relative to 2003, represents a 320,000 tonne reduction in CO2e[78] greenhouse gas emissions in 2010. We use the best mix of energy sources available to us at every one of our sites. We're continually looking for ways to be more energy efficient."[79]
In late 2018, Fonterra's Brightwater milk-processing plant, in association with Azwood Energy, began burning wood biomass, alongside coal, to reduce carbon emissions.[80] Fonterra's Stirling milk-processing plant will run solely on electricity.[81]
In February 2019, 350 Aotearoa, the New Zealand arm of the international climate movement 350.org, produced a video entitled, "Coalterra, Dairy for Death"[82] critical of Fonterra's coal use – estimated at half a million tonnes per year.
In July 2019, Fonterra announced it would install no new coal boilers.[83] Coal Action Network Aotearoa welcomed the decision, but warned against utilising other fossil fuels, such as gas, in substitution, suggesting wood biomass, as a better alternative.[84]
Pollution prosecution
In September 2010, Bay of Plenty Regional Council made a statement that it had prosecuted Fonterra for allowing nitric acid and a caustic cleaning agent from its Edgecumbe milk processing plant to spill into a storm water drain and into a water course. Fonterra was fined $24,000.[85] The Dominion Post[86] and The New Zealand Herald reported the prosecution.[87]
Fonterra is currently educating its sites on the best way to reduce pollution.[88]
Product issues
Sanlu milk scandal
In September 2008, one of the biggest dairy companies in China, the Shijiazhuang Sanlu Group, 43% owned by Fonterra,[89] recalled more than 10,000 tonnes of infant formula after a food safety scandal involving the criminal contamination of its raw milk supply with melamine. Court papers showed the company first began receiving complaints of children becoming sick after drinking its milk in December 2007, but only stopped production when Fonterra blew the whistle in September 2008.[90] After the initial focus on Sanlu, China's quality watchdog said that inspectors had also found the chemical melamine in baby formula produced by 22 companies nationwide.[91] An estimated 300,000 Chinese babies were affected, and six died after developing kidney problems as a result of drinking formula containing melamine.[92]
Fonterra first became aware of problems on 2 August 2008, when the Sanlu board, which had three Fonterra directors, was advised there was a problem with the contamination of infant formula. A trade recall began shortly after Fonterra was first notified.[93] Prime Minister Helen Clark later said Fonterra had been lobbying for a public recall since 2 August, but that "local authorities in China would not do it. At a local level … I think the first inclination was to try and put a towel over it and deal with it without an official recall." Ms Clark said she first heard of the contamination on 5 September and three days later ordered that Beijing be told directly, bypassing local and provincial Chinese authorities.[94]
On 21 September 2008, an editorial in The New Zealand Herald questioned the "moral courage and leadership" of Fonterra chief executive Andrew Ferrier. Citing Fonterra's number one corporate value, the journal questioned why it took nearly a month after it had become aware of the contamination before it notified the government. It said Fonterra's press release had been "minutely scrutinised by lawyers and spin doctors, and that the company was far less interested in 'moral courage and leadership' than it was in preserving its own position."[95] The next day, Helen Clark, agreed that the company had been too slow to speak out.[96] Ferrier was also condemned by Business Day for his "silent hand-wringing", when he should have immediately blown the whistle.[97] Ferrier denied Fonterra knew that Sanlu lied for eight months to hide complaints about its baby formula causing illness.[98] He said if one partner did not tell the truth to the other "you have a critical breakdown in that relationship". He admitted people deeper down in their organisation in China could have been "fooling us".[99] However, Access Asia, a Shanghai-based consumer consultancy, said Fonterra was a classic example of western executives in China "believ[ing] advice in business books that they must avoid making their local partners 'lose face' at all costs." It suggested Fonterra paid a heavy price in write-offs, a wrecked business and public condemnation.[100]
In a video press conference with reporters in September 2008, Ferrier said Sanlu's milk supply may have been sabotaged. He added the company did not come forward with the information earlier because it was waiting for the recall process to move through the Chinese system.[101]
David Oliver, a New Zealander who works as a corporate advisor to companies in the Chinese agricultural industry, feels that while Fonterra had board representation in Sanlu, it is unlikely they had much influence within the company as they had only a minority stake.[102]
Said Ferrier, "I can look myself in the mirror and say Fonterra acted absolutely responsibly in this one. If you don't follow the rules of an individual market place then I think you are getting irresponsible."[93] Ferrier later said the feedback he received from both government and business contacts in China was that Fonterra was seen to have acted with integrity.[103]
In September 2008, Henry van der Heyden, chairman of the board, said the scale of the tragedy has been "truly shocking". "As a direct consequence of the criminal contamination of milk in China, Fonterra has recognised an impairment charge of $139 million against the carrying value of its investment in SanLu." "Following this impairment charge, Fonterra's best estimate at this point of time, of the book value of its investment in Sanlu is approximately $62 million", which was 69 per cent below its previous carrying value.[99] "We’ve learnt an incredibly painful lesson through this and we will be much, much more suspicious worldwide on ensuring the safety and integrity of our supply chain everywhere in the world," said Ferrier. But he also pointed out that the company can never be 100% certain against a criminal contamination of the supply chain, which is what happened in this incident.[102]
On 17 September 2008, Fran O'Sullivan[104] noted that Fonterra had already set "up a 3000-head dairy farm in China itself to provide quality product and demonstrate best practice."
On 10 October 2008, Ferrier announced in Beijing that Fonterra will "donate NZ$8.4 million to the Soong Ching Ling Foundation over five years for a co-operative charity project to provide medical care and advice to pregnant women and the mothers of infants in rural communities." Andrew Ferrier said Fonterra was "shocked by the degree of tragedy" and the donated fund is set up to "help over the long-term in infants and maternal mother health." Andrew Ferrier said Chinese consumers have lost confidence in Sanlu, not Fonterra, and Fonterra is working towards rebuilding a safe supply chain of dairy products.[105]
In April 2009, during a state visit by New Zealand Prime Minister John Key to Beijing, Chinese Premier Wen Jiabao asked Prime Minister Key for help in developing food safety standards for China. Mr Key said the Chinese Premier considers 2008's contaminated milk scandal a one-off incident that can be put behind both countries.[92] A report by Fran O’Sullivan in the New Zealand Herald[106] said that Fonterra had learnt some heavy lessons from Sanlu and the company would have to have confidence in the safety of its milk supply chain in China before reinvesting significantly in the local production of dairy products.
On 24 November 2009 two Sanlu former workers Zhang Yujun and Geng Jinping were executed.
DCD contamination
In September 2012, traces of 2-Cyanoguanidine, a fertiliser commonly referred to as DCD that is used to slow down nitrate leaching, was found in some milk samples.[107] Fonterra, Federated Farmers and the Government moved quickly to reassure the public and overseas buyers there was no risk to health.[108] Fonterra has received praise for its handling of the DCD issue.[109] The levels were very low and attempts were made to prevent the test results from being reported in the media.[110]
On 16 August 2013 a Sri Lankan court banned the sale and advertising of all Fonterra products in Sri Lanka.[111][112] The health ministry has said tests by Sri Lanka's Industrial Technology Institute found DCD in some Fonterra powdered milks and it had ordered their recall.[111]
Botulism scare
On 3 August 2013, authorities in New Zealand announced a global recall of up to 1,000 tonnes of dairy products after tests turned up a type of bacteria that could cause botulism. Products included were infant formula, sports drinks, protein drinks and other beverages. The countries affected were New Zealand, China, Australia, Thailand, Malaysia, Vietnam, Sri Lanka and Saudi Arabia.[113]
Fonterra's head of its milk products business, Gary Romano, resigned over the scandal on 14 August 2013.[114]
In late August 2013 laboratory test results revealed that the bacteria found in the whey protein concentrate manufactured by Fonterra was not the botulism-causing Clostridium botulinum.[115]
See also
References
- "Fonterra Co-operative Group Limited (1166320) – Companies Office". Ministry of Business, Innovation and Employment. Retrieved 7 September 2014.
- "Annual Financial Results for the year ended 31 July 2017". Retrieved 23 March 2018.
- "Fonterra Website". Fonterra Co-operative Group. 5 September 2016. Retrieved 5 September 2016.
- "NZX launches milkpowder futures". National Business Review. NZPA. 4 June 2009. Archived from the original on 18 November 2014. Retrieved 30 September 2011.
- "Fonterra Annual Report 2010" (PDF). Archived from the original (PDF) on 15 December 2010. Retrieved 5 February 2011.
- "Company overview". Fonterra Co-operative Group. Archived from the original on 1 October 2012. Retrieved 28 August 2014.
- Stringleman, Hugh; Scrimgeour, Frank (1 March 2009). "Dairying and dairy products – Co-operatives and centralisation". Te Ara – the Encyclopedia of New Zealand. Ministry for Culture and Heritage / Te Manatu Taonga. ISBN 978-0-478-18451-8. Retrieved 14 October 2010.
- Philpott, H.G. (1937). A History of the New Zealand Dairy Industry: 1840–1935. Government Printer: Wellington
- Ward, A.H. (1975). A Command of Cooperatives. The New Zealand Dairy Board: Wellington
- "Global Co renamed Fonterra". The New Zealand Herald. 27 August 2001. Retrieved 15 February 2017.
- Leo Paul Dana; Jason Schoeman (2010). "An Entrepreneurial Innovation: Mega Cooperatives" (PDF). Asia Pacific Journal of Innovation and Entrepreneurship. 4 (1): 67–88.
- Stevenson, Philippa (9 April 2001). "Cabinet approves dairy merger waiver". The Nee Zealand Herald. Retrieved 15 February 2017.
- "Fonterra Co-Operative Group Ltd Company Profile, Information, Business Description, History, Background Information on Fonterra Co-Operative Group Ltd". Reference For Business. 2010. Retrieved 14 October 2010.
- "Fonterra's Food Safety Transformation". Food Safety Magazine. 11 December 2018. Retrieved 26 September 2019.
- AAP (24 June 2008). "Nestle sells desserts to Fonterra". The Sydney Morning Herald. Archived from the original on 20 August 2012. Retrieved 29 October 2010.
- Jeff Turnbull (1 November 2005). "Fonterra ogles Dairy Farmers' brands". The Sydney Morning Herald. Retrieved 19 October 2008.
- "Fonterra to sell Australian yoghurt dairy desserts business" (Press release). Fonterra. Archived from the original on 5 October 2016. Retrieved 4 October 2016.
- "Fonterra contract behind NZ involvement in Iraq". 3 News NZ. 20 December 2010. Archived from the original on 21 February 2014. Retrieved 18 March 2013.
- "NZ in Iraq to help Fonterra – cable". NZ Herald. 20 December 2010.
- Warrick, Ambar (13 May 2019). "NZ's Fonterra sells Tip Top ice cream to Froneri for $250 million". Reuters. Parent. Retrieved 19 May 2019.
- Anthony, John (13 May 2019). "Fonterra sells Tip Top to global ice cream giant Froneri for $380m". Stuff.co.nz. Nine Publishing. Retrieved 19 May 2019.
- "Tip Top sale: Fonterra sells ice cream company to dairy giant Froneri". The New Zealand Herald. New Zealand Media and Entertainment. 13 May 2019. Retrieved 19 May 2019.
- dairyreporter.com. "Fonterra sells DFE Pharma share to reduce debts". dairyreporter.com. Retrieved 26 September 2019.
- "New Zealand's Fonterra sells its 50% stake in DFE Pharma for $400 million". Reuters. 24 September 2019. Retrieved 26 September 2019.
- Stevenson, Philippa (21 August 2002). "Van der Heyden catapulted into top job at Fonterra". The New Zealand Herald. Retrieved 6 June 2020.
- Fox, Andrea (12 February 2013). "Hooray Henry? No, there's plenty still to do". BusinessDay.co.nz. Retrieved 6 June 2020.
- "Former Fonterra chairman John Wilson dies". Otago Daily Times. 28 January 2019. Retrieved 6 June 2020.
- Mckay, Christine (30 July 2018). "Tararua man John Monaghan now at helm of Fonterra". Hawkes Bay Today. Retrieved 6 June 2020.
- Edmunds, Susan; Hutching, Gerard (5 March 2020). "Fonterra chairman John Monaghan standing down". Stuff. Retrieved 6 June 2020.
- Foxcroft, Debrin (26 June 2020). "Fonterra names Peter McBride as new chairman". Stuff. Retrieved 26 June 2020.
- Fonterra announces start of Capital Structure consultation programme Archived 16 February 2008 at the Wayback Machine, Media release, Fonterra website, November 2007.
- 'Fonterra listing a win-win-win situation' Archived 14 October 2008 at the Wayback Machine, Brian Gaynor, Milford Asset Management website, retrieved 11 June 2008.
- "A bold step forward for Fonterra". The New Zealand Herald. 17 November 2007. Archived from the original on 14 October 2012. Retrieved 5 September 2019.
The global ambitions enunciated at its birth have not been translated into action. That may, however, be about to change if dairy farmers embrace the bold path outlined by Fonterra management
- Gay, Edward (1 September 2009). "Fonterra offers farmers more shares in new capital strucuture". The New Zealand Herald. APN. Retrieved 13 August 2010.
- Fox, Andrea (30 June 2010). "Fonterra could face 'acute' pressure". Businessday.co.nz. Fairfax. Retrieved 13 August 2010.
- "Three-step process to strengthen Fonterra" (Press release). Fonterra. 18 September 2009. Archived from the original on 10 October 2010. Retrieved 13 August 2010.
- "Farmers give Fonterra green light". The New Zealand Herald. APN. 30 June 2010. Retrieved 13 August 2010.
- NZPA (17 June 2010). "Carter urges farmers to vote on Fonterra capital". National Business Review. Retrieved 13 August 2010.
- "Fonterra capital restructure approved". The New Zealand Herald. APN. 18 November 2009. Retrieved 13 August 2010.
- "Three-step process to strengthen Fonterra" (Press release). Fonterra.com. 18 September 2009. Archived from the original on 10 October 2010. Retrieved 13 August 2010.
- "Three-step process to strengthen Fonterra". Fonterra. 18 September 2009. Archived from the original on 10 October 2010. Retrieved 13 August 2010.
- Withers, Tracy (29 June 2010). "Fonterra Farmers Approve Plan Allowing Share Trading". Bloomberg Businessweek. Bloomberg. Retrieved 13 August 2010.
- "Farmers agree to radical Fonterra plan". TVNZ. 30 June 2010. Archived from the original on 13 June 2011. Retrieved 5 September 2019.
- Fox, Andrea (30 June 2010). "Farmers vote to trade shares". The Press. Fairfax. Retrieved 13 August 2010.
- Sarah Deckert "Fonterra gets glimpse of documents after bega boss corrects statement" The Sydney Morning Herald 12 March 2020 https://www.smh.com.au/business/companies/fonterra-gets-glimpse-of-documents-after-bega-boss-corrects-statement-20200311-p548y5.html
- "Bonlac bid just start for Fonterra". The Sydney Morning Herald. 8 June 2005. Retrieved 5 April 2008.
- Fonterra. "Our Brands". Fonterra. Archived from the original on 19 April 2013. Retrieved 25 April 2013.
- "Water Quality in Selected Dairy Farming Catchments" (PDF). Ministry for the Environment. New Zealand Government. 2009. Archived from the original (PDF) on 14 February 2013. Retrieved 15 February 2013.
- "Fonterra Environmental Group Policy" (PDF). Fonterra. 19 January 2006. Archived from the original (PDF) on 17 October 2007. Retrieved 13 March 2008.
- "Fonterra must explain self-reporting inaccuracy" (Press release). Green Party. 13 December 2011. Retrieved 15 February 2013.
- "Audit Raises Concerns Over 'Clean Streams' Credibility". Fish & Game New Zealand. 13 December 2011. Retrieved 15 February 2013.
- "Fonterra must act on dirty dairying to protect NZ" (Press release). Green Party. 22 July 2009. Retrieved 31 May 2010.
- "Fonterra to check effluent systems on every farm, every year" (Press release). Fonterra. 18 March 2010. Archived from the original on 15 December 2010. Retrieved 8 March 2011.
- "Improving fresh water quality is the common goal" (PDF). Local Government New Zealand. 13 December 2011. Archived from the original (PDF) on 9 February 2013. Retrieved 15 February 2013.
- "Fonterra backs green award". Rural News. 11 March 2008. Retrieved 13 March 2008.
- "Fonterra launches light-proof bottle". 3 News NZ. 21 March 2013. Archived from the original on 13 April 2013.
- "EECA Awards 2007". Energy Efficiency and Conservation Authority. Archived from the original on 10 May 2011. Retrieved 8 March 2011.
- "Fonterra factory wins environmental award". Retrieved 8 March 2011.
- "Previous Environmental Packaging Awards and Supreme Award Winners". The Packaging Council of New Zealand Inc. Archived from the original on 8 February 2013. Retrieved 8 March 2011.
- "Fonterra Brands New Zealand – Export – TVNZ – TVNZ NZ Marketing Awards". Archived from the original on 15 April 2014. Retrieved 14 April 2014.
- "Anchor Ethanol" (PDF). Bioenergy Association of New Zealand. Archived from the original (PDF) on 24 July 2011. Retrieved 8 March 2011.
- "Fonterra Explores Alternative Fuel" (Press release). Fonterra Co-operative Group Ltd. 3 September 2004. Retrieved 16 January 2011.
- "Dairy based biofuel launched" (Press release). Gull Petroleum. August 2008. Archived from the original on 24 July 2011. Retrieved 16 January 2011.
Fonterra has been contracted to supply the fuel company Gull New Zealand with ethanol which will be added to its premium petrol. Fonterra can produce 30,000 litres of ethanol a day at its Edgecumbe plant, and over five million litres in a dairy season
- "Gull Buys More Than 5m Litres of Bioethanol". Voxy. 21 April 2010. Retrieved 8 March 2011.
- "Fonterra Launches The Switch to Z Biodiesel". Fonterra Media Releases and News. 1 July 2016. Archived from the original on 14 September 2016. Retrieved 6 September 2016.
- "Forest & Bird calls on Fonterra to clean up its act on the Manawatu River" (Press release). Royal Forest and Bird Protection Society of New Zealand. 9 August 2006. Retrieved 13 March 2008.
- "Pact signed to clean up dirty Manawatu". TVNZ. Retrieved 8 March 2011.
- "Water care on-farm". Archived from the original on 23 November 2010. Retrieved 8 March 2011.
- Guy Montague-Jones (25 August 2009). "Greenpeace accuses Fonterra of contributing to deforestation". AP Food Technology. Retrieved 21 September 2009.
- "Palm kernel". Taranaki Daily News. 2 July 2011. Retrieved 10 March 2011.
- "Activists chain themselves to ship". TV One News. TVNZ Ltd website. 16 September 2009. Archived from the original on 23 May 2010. Retrieved 21 September 2009.
- Tangaroa Snell (23 August 2009). "Fonterra facing critic from Greenpeace over palm oil feed". Top News website. Archived from the original on 16 May 2010. Retrieved 21 September 2009.
- "Fonterra's role in rainforest destruction exposed" (Press release). Greenpeace Aotearoa New Zealand. 22 August 2009. Archived from the original on 2 August 2012. Retrieved 30 September 2009.
- NZPA (17 September 2009). "Greenpeace protest won't shift Fonterra or PM". The Dominion-Post. Retrieved 21 September 2009.
- "Fonterra Announces New Palm Products Sourcing Standard". Fonterra News and Media Releases. 12 August 2016. Archived from the original on 14 September 2016. Retrieved 6 September 2016.
- "Climate activists shut down coal mine in protest against Fonterra". Fairfax Digital: Farm Online, Stock & Land. 23 November 2009. Retrieved 24 November 2009.
- "Greenpeace protest at Gore's New Vale mine". Otago Daily Times (Online). 17 November 2009. Retrieved 24 November 2009.
- "Carbon dioxide equivalent – the internationally recognised measure for greenhouse gas emissions allows gases such as Methane (CH4), Nitrous Oxide (N20) and Carbon Dioxide (CO2) to be compared on a like for like basis". Note.
- "Protest blocks coal depot for Fonterra dairy factory". NBR. Retrieved 9 March 2011.
- "Fonterra's Brightwater site burns wood biomass to reduce emissions". Stuff. Retrieved 15 September 2019.
- "Fonterra Stirling plant first in New Zealand to convert from coal to electricity". Stuff. Retrieved 15 September 2019.
- Coalterra -Dairy For Death, retrieved 15 September 2019
- "Fonterra pledges to stop building new coal boilers immediately". Stuff. Retrieved 15 September 2019.
- Thursday; July 2019, 18; Network, 11:49 am Press Release: Coal Action. "Coal group welcomes Fonterra's coal exit | Scoop News". www.scoop.co.nz. Retrieved 15 September 2019.CS1 maint: numeric names: authors list (link)
- "Three dairy farms and Fonterra fined for polluting" (Press release). Environment Bay of Plenty. 27 September 2010. Retrieved 27 September 2010.
Bay of Plenty Regional Council also successfully prosecuted Fonterra for a chemical spill, which ended up in a storm water drain, at its Edgecumbe milk processing factory...Fonterra was convicted for allowing contaminants (nitric acid and caustic cleaning agent) to discharge to a storm water drain and into a water course and was fined $24,000
- NZPA (27 September 2010). "Fonterra fined $24,000". The Dominion Post. Fairfax NZ Ltd. Retrieved 27 September 2010.
- NZPA (27 September 2010). "Fonterra fined for acid in waterway". The New Zealand Herald. Retrieved 27 September 2010.
- "Fonterra and the Environment" (PDF). Archived from the original (PDF) on 15 December 2010. Retrieved 9 March 2011.
- "Fonterra And San Lu Reach Joint Venture Agreement". Scoop. 2 December 2005. Retrieved 15 September 2008.
- Sommerville, Quentin (22 January 2009). "Little comfort in milk scandal verdicts". BBC News.
- "China seizes 22 companies with contaminated baby milk powder". Xinhua News Agency. 17 September 2008. Retrieved 13 June 2009.
- Kissun, Sudesh (21 April 2009). "China seeks food safety". Rural News. Retrieved 13 June 2009.
- "'Sabotage' behind poison milk – Fonterra". Stuff.co.nz. Fairfax Media Ltd. 15 September 2008. Archived from the original on 13 June 2011. Retrieved 6 February 2010.
- Toy, Mary-Ann (16 September 2008). "Sabotage claim in milk powder scandal". The Sydney Morning Herald. Retrieved 4 February 2010.
- "Editorial: Fonterra poison milk scandal a disaster waiting to happen". The New Zealand Herald. 16 September 2008. Retrieved 27 September 2008.
- "Fonterra slow to speak on milk scandal – PM". New Zealand Herald. 21 September 2008. Retrieved 24 September 2008.
- John Minto (30 September 2008). "Fonterra has failed us all". Business Day. Archived from the original on 29 September 2010. Retrieved 27 September 2008.
- Hembry, Owen; Gibson, Eloise (24 September 2008). "Fonterra had not heard of milk revelations – Ferrier". The New Zealand Herald. Retrieved 27 September 2008.
- "Fonterra takes 69pc SanLu writedown". Stuff: Business Day. Retrieved 9 May 2010.
- Richard Spencer & Peter Foster (24 September 2008). "China milk scandal threatens giant dairy firm". The Telegraph. London.
- Ramzy, Austin; Lin Yang (16 September 2008). "Tainted-baby-milk scandal in China". Time Magazine. Retrieved 18 February 2010.
- Taylor, Sandra (1 October 2008). "Fonterra not the villian [sic] in Chinese milk scandal". Country-Wide Northern. NZX Rural. Archived from the original on 21 May 2010. Retrieved 18 February 2010.
- "Fonterra makes $8m donation". The Dominion Post. Fairfax. 10 October 2008. Retrieved 18 February 2010.
- O'Sullivan, Fran (17 September 2008). "Soul-searching for Fonterra". The New Zealand Herald. Archived from the original on 23 October 2012. Retrieved 5 September 2019.
- Hembry, Owen (11 October 2008). "Fonterra puts up $8.4m to provide care in China". The New Zealand Herald. Retrieved 9 November 2008.
- O'Sullivan, Fran (2 May 2009). "So long, Sanlu". The New Zealand Herald. APN. Retrieved 18 February 2010.
- "Government downplays DCD risk". 3 News NZ. 27 January 2013. Archived from the original on 15 April 2013. Retrieved 3 August 2013.
- Astley, Mark (28 January 2013). "Government defends Fonterra's safety". 3 News NZ. Archived from the original on 15 October 2013. Retrieved 3 August 2013.
- "DCD concerns: NZ handling of crisis was 'textbook' – Rabobank". Dairy Reporter. 21 February 2013.
- Watkins, Tracy (14 April 2013). "Secrecy Over DCD in Milk Scare Revealed". Sunday Star-Times. Retrieved 13 April 2013.
- "Sri Lankan court bars Fonterra milk products for two weeks". Reuters. 16 August 2013.
- "Archived copy". Archived from the original on 19 August 2013. Retrieved 16 August 2013.CS1 maint: archived copy as title (link)
- "New Zealand botulism scare triggers mass global recall". Fox News. 3 August 2013. Retrieved 3 August 2013.
- Gyles Beckford (14 August 2013). "Fonterra's milk products chief resigns after botulism scare". Reuters.
- "Fonterra botulism crisis was false alarm – Business – NZ Herald News". The New Zealand Herald. 28 August 2013.
External links
![]() |
Wikimedia Commons has media related to Fonterra. |