Fon­terra farm­ers ‘miffed’ af­ter Danone da­m­ages

South Waikato News - - Rural Delivery - GER­ARD HUTCHING AND GER­ALD PIDDOCK

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.

NIGEL MARPLE

An empty shelf at a su­per­mar­ket in Huntly af­ter a prod­uct re­call from Nu­tri­cia, which is sup­plied by di­ary gi­ant Fon­terra.

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