Wednesday, 7 January 2009

FONTERRA STILL DROWING IN SEA OF CONTAMINATED MILK

Fran O'sullivan is one of our favourite columnists. shes not boring like Colin James and todays missive is one of her best. In many ways its a brave column. Fonterra is the white backbone of the economy and her critical analysis should be read with concern by all farmer shareholders. What we still want to know is how many babies have really died. Epidemiologists we have talked to reckon that there have been waaaay more deaths that the four reported. Ferriers lack of intel on what was happening around the guilty plea by the San Lu company chair made him look like a dick.

We also reckon that Fonterras handling of this issue will be used as a PR example of what not to do by all tutors of the dark arts.

update - this from Macdoctor


Your epidemiologist friends are certainly right. At one point China reported 158 babies were in acute kidney failure. Given that this is a serious condition needing a lot of specialised equipment, it is unlikely all of them survived.

A neonatologist friend reckoned that 20-30% would die within a month or two and about half of the survivors would die within the next 10 years from complications of chronic renal failure.

Yes. You did read that right. 30-40 babies are already dead. Another 50-60 will not see their teens.

Feel free to be sick. I know I will.

5 comments:

Whetu Chini said...

There are a few rules of crisis/issues management, few of which appear to have been observed by Fonterra regarding the Sanlu debacle.

Rumour loves a vacuum. The most precious thing any person or organisation has is their reputation. Consequently I am astounded that Fonterra took so long to make any substantive statement on Sanlu.

Right at the beginning, Hank van der Heyden should have made a statement along these lines:

"Fonterra is not in the business of killing babies. We are aghast and appalled by what has happened in China. We will be having a long hard look at what has happened here and will be fully cooperating with the Chinese authorities in their investigations."

I smell the putrid breath of lawyers and accountants here.

Fonterra has considerable advance knowledge of what was going on. It appears that their first reflex was to mitigate financial and legal risks, forgetting about managing their reputation risk.

Maybe their highly-paid communications advisers were ringing warning bells and offering sage advice. If that is true then one wonders why that advice was discounted. If it isn't true, then they should be sacked.

I have whanau and friends who have invested an awful lot into dairying. They have a right to expect higher standards of governance and oversight than appears to have been applied here.

Cactus Kate said...

Every Chinese baby death of late is being blamed on the poisoned milk.

Thing is, coming out of China Fonterra won't bloody know how many babies have really died.

No people are more versed in the dark art of PR than the Chinese.

Anonymous said...

Dumb business 101:
"You cant save both your arse and your face at the same time."

Fonterra tried to save its arse, while forgetting China is all about saving face.

China will not take Fonterra's blame pushing on to them lightly, Fonterra needs to realise they cant treat some cultures with the unsophisticated contempt they treat their own. Fonterra has culpability and China damn well knows it, basically they trusted Fonterra to help run a company with their "expertise"- and failed.

Expect to see Fonterra taking the metaphorical single bullet over this as well as Sanlu, if they do not offer a sacrafice.

Fonterra should look to someone like Rob Fyfe as an example of how to manage a crisis- honesty and openess- forgot putting the paid liers up as fronts to the company-its an insult to everyone, including the Chinese who people seem to forget have had a trading and business culture a couple of thousand years longer than ours- they have their time tested ways of dealing with incompetents, and its not pretty.

macdoctor said...

Your epidemiologist friends are certainly right. At one point China reported 158 babies were in acute kidney failure. Given that this is a serious condition needing a lot of specialised equipment, it is unlikely all of them survived.

A neonatologist friend reckoned that 20-30% would die within a month or two and about half of the survivors would die within the next 10 years from complications of chronic renal failure.

Yes. You did read that right. 30-40 babies are already dead. Another 50-60 will not see their teens.

Feel free to be sick. I know I will.

Cactus Kate said...

After watching the handling of many crisis in China (avian flu, pollution, milk, etc) there are appear three rules:

1. Cover up
2. Lie
3. Hold someone responsible and execute them.

Of more an issue here is that Fonterra's hicks have been lied to big time. Instead of the Big Bosses at Fonterra (Ferrier and Van Der Heyden) suiting up and getting on a plane to Beijing immediately to show "face" and a furious one at that, he sat on his hands at a press conference in bloody Auckland and as such the Chinese continue to lie to him.

Still to this day have either of them fronted up in China at all?

I am reading a report at my desk that 300,000 babies have kidney or renal problems, only 6 have died.

Police in Beijing detained parents who were about to hold a press conference demanding more compensation. Which may be why no accurate information is being made available.

But the Chinese truly excel at mopping up tragedy. The going rate on killing a baby for the dairy industry in China is 200,000 Yuan which equates to around US$29,000.

As the average rural disposable (in the hand) income in China is around 4000 Yuan per year this is being received poorly by many Chinese who see it as a complete windfall to the often dirt poor recipients.

I kid you not, this is a country where after the Sichuan quake, letters to the editor were published questioning the amount of aid money to fix an area as it was perceived to be a dump in the first place.

All and all, if Fonterra were going to be involved in a scandal such as this..China was the cheapest place to have it happen!