Big beasts make easy targets

Fonterra CEO Theo Spierings

editor's insight

Nevil Gibson

Fonterra is in a dilemma not entirely of its own making over milk products sold in China.

It is all too easy for the country’s top business media commentators (who I won’t bother to name) to unleash a fusillade, accusing Fonterra of a “cover up” and creating a threat to New Zealand’s single largest export market.

Nothing dire will happen, of course, as the Chinese, in particular, can’t get enough New Zealand-made milk powder and this country will remain the world’s largest supplier of infant formula under a variety of brands.

The main issue is not Fonterra’s handling – most major companies find there is no easy way with food scares, real and imagined – but whether there is one at all.

The Chinese media, which is strictly controlled for content and political purpose, is constantly finding issues to undermine the reputation of foreign companies (as Fonterra already well knows). And food safety is a major issue for Chinese consumers, who have to deal with constant cases of contamination that cause illness and death.

The authorities also know that foreign companies are all ethical and operate under strict regulation in the West, including Japan. So to cover up the inability of Chinese authorities to police local activity, they prefer to persecute the easy targets who can’t fight back. These companies have included Wal-Mart, Yum Brands (owner of KFC and Pizza Hut), Coca-Cola and many others.

Some of the complaints may be genuine but that is usually because the foreign companies are dependent on untrustworthy local suppliers and unable to import substitutes. The one thing that is certain is that the losses are real for foreign companies, who can’t seek redress.

In the case of imports, as many New Zealand exporters know, goods are held up for the slightest technical reasons. Business rules in China cannot be compared with those operating in the West.

So if the Chinese media report that milk powder made in New Zealand is “toxic,” it won’t be because it is a fact but because it serves a wider purpose of engendering “food scares” about foreign products.

Aiding the cause
Of course, Greenpeace, the Green Party and their media allies fall easily into the trap of aiding this cause because they believe all food produced under capitalism is scary, that irradiation of herbs is akin to nuclear fallout and genetically engineered plants are poisonous (no one has died from any of these).

For example, the NZ Herald headlines Susan Kedgley’s latest effort to undermine public confidence in food standards as “Another food scare, another crisis.”

In fact, there has never been a crisis from a food scare; usually so-called dangers such as “pink slime” in mince and alar in apples prove to be fictional while the real food dangers, such as E.coli and salmonella, are found in unsprayed or uncooked veges and meat.

New scientific tools can trace ever-decreasing amounts of anything in everything. But why should it be a “cover up” if these amounts pose no danger under any circumstances and are the subject of scrutiny?

The Science Media Centre has an “expert responds” section where the facts are displayed.

On DCD (dicyandiamide), which is used in fertiliser to reduce nitrates at certain grass-growing periods, Professor Jacqueline Rowarth writes that it is far less dangerous than salt and cannot be compared with melamine, a toxic chemical substance that (in China) was illegally added directly to the milk to boost protein counts.

But just how Fonterra, the Ministry of Primary Industries and other producers can explain the science to consumers without being accused of “cover ups” and triggering “food scares” is something the media and its commentators have yet to explain.

Boeing's green dilemma
The media are not the only ones guilty of over-reaction to imaginary scares.

The worldwide grounding of Boeing’s Dreamliners over dodgy batteries is costly for both airlines and the manufacturer.

But such an action comes at no cost to the regulators, who enjoy the total confidence of the media unless, of course, they fail to prevent such events as financial calamities.

So far, a couple of weeks after the order, explanations for flare ups in the lithium-ion batteries are still not forthcoming.

The politician who is ultimately responsible for the grounding, Transportation Secretary Ray LaHood, has a record of endangering companies without sound reasons.

Under his watch, when Toyota was ordered to recall 2.3 million vehicle due to cases “sudden acceleration,” he said the cars were too dangerous to drive.

It turned out there was no fault with the car or its design; it was a case of drivers putting their foot on the accelerator instead of the brake.

Another issue in the Boeing grounding: Has the push for fuel efficiency and “greenness” by airlines to reduce their “pollution” of the skies forced Boeing to go too far in using high-density batteries?

The worst outcome is that the regulators could force a redesign that will result in making the aircraft heavier, less efficient, more costly for travellers and less profitable for airlines.

Now that would be one in the eye for green technology.

This article is tagged with the following keywords. Find out more about My Tags

Post Comment

3 Comments & Questions

Commenter icon key: Subscriber Verified

What does the act of spraying or not spraying (with what?) have to do with the presence or absence of E. coli, Salmonella , etc in vegetables and meat?

Reply
Share

Its interesting to see that all comments about DCD contamination in milk powder only seek to pillory Fonterra. Westland has also found DCD traces in some of their powder and nobody raises a finger. What gives Westland the right to escape without censure while Fonterra once again bears the full brunt of public approbium?

Reply
Share

It was N.Z. inc. which bore the brunt: all N.Z. Dairy products were devalued , except perhaps the organic products.
It seems to be lost on many that clean , green and fresh is what consumers want.
Simple.
Why can't they have it?
Just milk , without contaminants is what the public wants.
There was never any need to have any DCD in the milk , regardless of its toxicity.
It was never a food safety issue: it was a consumer perception that milk should contain just milk. What's the problem with that?

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7785 -0.0048 -0.61%
AUD 0.8853 -0.0020 -0.23%
EUR 0.6219 0.0005 0.08%
GBP 0.4869 -0.0028 -0.57%
HKD 6.0413 -0.0333 -0.55%
JPY 87.4210 1.8540 2.17%

Commods

Commodity Price Change Time
Gold Index 1171.1 -27.000 2014-10-31T00:
Oil Brent 85.9 -0.380 2014-10-31T00:
Oil Nymex 80.5 -0.520 2014-10-31T00:
Silver Index 16.1 -0.310 2014-10-31T00:

Indices

Symbol Open High Last %
NZX 50 5370.2 5405.3 5370.2 0.33%
NASDAQ 4639.4 4641.5 4566.1 1.41%
DAX 9283.4 9339.3 9114.8 2.33%
DJI 17208.8 17395.5 17195.4 1.13%
FTSE 6463.6 6553.4 6463.6 1.28%
HKSE 23913.7 24046.4 23702.0 1.25%
NI225 15817.1 16533.9 15658.2 4.83%