Fonterra botulism scare laid bare in board inquiry

A woman uses her mobile phone in front of an advertisement for Fonterra in Jinan, East Chinas Shandong province, August 12, 2013. [Photo / icpress.cn]

WELLINGTON -- New Zealand dairy giant Fonterra failed to recognize the "explosive" risk to its reputation caused by its global botulism scare in August when it first surfaced, according to an independent inquiry commissioned by the company's board of directors.

The inquiry report, released Tuesday, made 33 recommendations to help avoid a repeat of the fiasco that saw a global recall of products after a batch of whey protein concentrate (WPC) was falsely identified as having been contaminated with a bacterium that could cause botulism.

The inquiry team found a number of factors, including a lack of senior oversight of crucial decisions, problems with tracing potentially affected product and belated escalation of the issue, contributed to the event in August this year.

"There were shortcomings in a number of areas, which, compounded by a number of events and co-incidences, converged to create this significant issue," Jack Hodder, who led the inquiry team, said in a statement.

The inquiry found that as well as failures in WPC testing and the preparation and cleaning in regimes, the company was "unable to promptly and definitively track the destinations" of the affected WPC batches.

Staff also belatedly recognized "the explosive reputational risk involved" to Fonterra's global reputation and delayed informing senior management and the board.

Fonterra's crisis management planning, including external communications, was inadequate for the event and the external communications were "not well executed".