Fonterra review findings announced

Wednesday, 04 September, 2013

Fonterra is choosing to see its recent recall as a glass half full (of whey protein, presumably), rather than half empty. Reporting on the findings of its operational review, Chief Executive Theo Spierings said the review has enabled it to strengthen its systems to prevent such an incident occurring again.

“At Fonterra, we already have world-class manufacturing facilities, quality systems and robust testing regimes in place,” Spierings said. “This even has stress-tested all of them. Overall our systems worked well, while some aspects showed room for further improvement.”

The review uncovered the following findings:

  • The decision to reprocess the original WPC80 and not downgrade the product, in combination with the use of an item of non-standard equipment, was the cause of the contamination.
  • A one-off lapse in information sharing across two parts of the business led to delays in testing.
  • This issue should have been escalated to CEO level earlier.
  • A major upgrade of the computer systems at some of Fonterra’s sites immediately prior to the recall resulted in product tracing taking longer than it should have.
  • Although Fonterra has clearly established domestic and international product recall systems, the size and complexity of the WPC80 recall was a factor, particularly given the product had itself become an ingredient in the products of multiple customers.

The company has also outlined a number of improvements to ensure quality and safety, and increase transparency.

“We have already created a new role of Group Director of Food Safety and Quality reporting directly to the CEO, strengthened the remit and scope of our Food Integrity Council, and launched an internal Food Safety and Quality Hotline for staff and contractors to escalate any concerns about potential food safety risks. We have also completed quality audits at our sensitive nutritional plants, including Hautapu,” Spierings said.

“We also plan to carry out a wide-ranging review of our traceability systems in our global businesses. We are introducing additional authorisation requirements for non-standard processing and testing, and are conducting specialised audits of our global manufacturing plants and product quality standards.

“We have learnt a lot throughout this process, about things that worked well and things that can be improved. For me, the thing that stands out as a key strength is the collaboration and cooperation that exists between Fonterra and our nutritional customers. Our close working relationships enabled us to act quickly with the common goal of protecting public health.

“Even though the whey protein concentrate test result proved to be a false-positive, we are not going to miss this important opportunity to step up across our entire business.

“In world-class companies, there is a constant focus on finding ways to improve in every aspect of your operations. As a world-leading supplier of dairy nutrition, this is what we are doing - and I am confident that the action plan we have announced today will make us even stronger.”

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