Fonterra farmers ‘miffed’ after Danone damages
Fonterra farmers are seething that their co-operative has to fork out $183 million in damages to French company Danone after its precautionary recall of whey protein in August 2013.
Fonterra has lowered its forecast earnings per share range for the 2017/18 financial year to 35 to 45c - down from 45 to 55c - after assessing the financial implications of the decision.
Federated Farmers vicepresident Andrew Hoggard said, speaking as a Fonterra shareholder, the decision to cut the dividend made him feel ‘‘pretty pissed off’’.
‘‘Most farmers will be a little miffed. Farmers own the company so the buck stops with us, but I tell you what, if next year, all the senior managers get big fat bonuses I will be exceptionally effed off.
‘‘At the end of the day, bonuses are paid for going above and beyond and obviously we didn’t go above and beyond that year and we have to pay for it.’’
Chairman John Wilson also expressed his ‘‘anger and disappointment’’ at the decision of a Singapore arbitration tribunal.
‘‘I was angrier in 2013 when I found out about the false test,’’ he told a press conference on Friday afternoon.
Chief executive Theo Spierings said despite the case, Fonterra wanted to renew its commercial relationship with Danone.
He said the co-operative thought it had been covered by an $11m limitation of liability. ‘‘It’s a precedent making decision’’ which other companies would be
‘‘Most farmers will be a little miffed. Farmers own the company so the buck stops with us.’’ Andrew Hoggard
watching, he told the press conference.
Both expressed a hope that there would be no further court action, either from Danone or the other seven companies which Fonterra supplied at the time of the incident.
Fonterra had come to an agreed settlement with the other seven within several months of the scare.
The co-operative’s lawyers would continue to ‘‘pore over’’ the 302-page decision, but recognised there were few options for challenging it.
An empty shelf at a supermarket in Huntly after a product recall from Nutricia, which is supplied by diary giant Fonterra.