Fonterra cuts earnings forecast after order to pay $183m to French food giant over botulism scare

Dairy giant Fonterra has cut its earnings forecast in response to being ordered to pay French food giant Danone $183 million over the 2013 botulism scare.

Fonterra says the decision by the arbitration tribunal in Singapore has no impact on the forecast Farmgate Milk Price.

The company says it has assessed the potential financial implications of the decision and made a prudent decision to revise its forecast earnings per share range for the 2017/18 financial year to 35 to 45 cents, down from 45 to 55 cents.

The botulism scare stemmed from Fonterra quarantining several batches of whey protein concentrate after there were concerns they could have been contaminated with clostridium bacteria.

Danone, then a buyer of Fonterra products, began a large-scale recall which they said cost about $610m, and ceased doing business with Fonterra.

It was later confirmed there had been no food safety risk to the public. 

Fonterra is in a strong financial position and is able to meet the recall costs - Fonterra CEO Theo Spierings

The French company had sought damages from Fonterra of up to $1.09 billion.

Fonterra's CEO, Theo Spierings, said the company is "disappointed that the arbitration tribunal did not fully recognise the terms of our supply agreement with Danone, including the agreed limitations of liability, which was the basis on which we had agreed to do business".

"The decision to invoke a precautionary recall was based on technical information obtained from a third party, which later turned out to be incorrect." he said in a statement.

"While there was never any risk to the public, we have learned from this experience and as a result have made improvements to our escalation, product traceability and recall processes, and incident management systems," Mr Spierings said. 

"Fonterra is in a strong financial position and is able to meet the recall costs," he added. 

Danone said in a statement it welcome the Singapore arbitration decision, saying it "underscores the merit of its legal actions against Fonterra".

"Danone believes that food companies and their suppliers can only work together through a solid relationship based on trust, transparency and accountability," the statement read.

Fonterra today requested a temporary trading halt ahead of the tribunal decision.

Botulism is a serious and potentially fatal bacterial infection caused by toxins produced by clostridium.

Duncan Coull, chairman of the Fonterra Shareholders' Council, said the arbitration decision has made this a tough day for the co-op and its farmer owners who will ultimately bear the cost, a fact he says is not lost on the Fonterra business.

"Our Co-op has made significant strides since the 2013 incident in terms of strengthening its operational processes, culture, and governance - as per the independent review process recommendations - and embedding them into our Co-op's functions and framework," he said.

Mr Coull said the council was also confident the co-op acted with integrity when it issued the precautionary recall.

CEO Theo Spierings says Fonterra can afford it, and it's unlikely it can challenge the decision over the Botulism scare. Source: 1 NEWS



Police investigations and search for pilot underway after Carterton school students were hospitalised

A police investigation is underway at the Carterton school where 10 primary school children were taken to Wairarapa Hospital after falling ill yesterday afternoon.

Emergency services were called to South End School at approximately 1pm yesterday with reports of an unpleasant smell.

Paramedics treated 40 other people - children and adults - with minor symptoms and over 100 people had to go through a decontamination process.

Police searched the school grounds this morning but were unable to find the source of the smell, Wairarapa Area Commander Inspector Scott Miller said.

"Witnesses have described seeing a grey and white or red and white plane, possibly a Cessna, flying near the school between 1.30 and 2.30pm yesterday," Inspector Miller said.

While there is no evidence to indicate the plane is the source of the smell, though Inspector Miller says they'd like to speak to the pilot.

"The CAA is also trying to locate the aircraft."

Board Chair Brian Chin says children who left their belongings at the school last night will be able to collect them on Monday, when school "resumes as normal".

"A debrief with staff with happen next week." 

Parents waiting outside South End School.
Parents waiting outside South End School. Source: 1 NEWS

Anyone living close to the school with any further information is urged to get in touch with Masterton Police on (06) 370 0300.

A plane is suspected of accidentally spraying the school with pesticide and several children have been hospitalised. Source: 1 NEWS

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Man dies after becoming trapped under vehicle while pushing it down driveway in Auckland

A person has died after becoming trapped under a vehicle in Highland Park, East Auckland.

Police confirmed that emergency services were required to attend an incident that occurred on private property at around 12:15pm today.

Initial reports suggest the man was pushing a vehicle down a driveway when he somehow became trapped underneath it.

His next-of-kin have been notified and the death will be referred to the Coroner.

Ambulance Source: 1 NEWS

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'Laying in a pool of blood' - One dead, another arrested following stabbing at family harm incident in Papamoa

A man is dead and another has been arrested after a family harm situation in Papamoa this morning.

A local man in his 20s has been arrested in relation to the death of a man in his 40s, who was fatally stabbed at about 8.30am this morning.

Police say that no one else has been injured and no one else is being sought in relation to the death.

Police assure there is no risk to the public.

Neighbour Todd Madden, who was walking to their car on the front lawn with his 6-year-old, told NZ Herald they saw a "young guy covered in blood" in a driveway.

"[He] yelled at me to call the police."

"Police arrived and he laid down on the ground and I grabbed the two kids."

The children told him there was a victim inside "laying in a pool of blood".

"They had been crying loudly for about 30 minutes but I just thought they were being naughty - I wished I had've gone over earlier."

Source: 1 NEWS


New rules allow ministers' nannies to travel on the taxpayer, but PM will cover Clarke Gayford's US trip

New rules for ministers with babies who are travelling overseas allow them to to take a nanny or carer paid for by taxpayers. 

However, Prime Minister Jacinda Ardern says she does not expect the taxpayer to pay for both her partner, Clarke Gayford, and a carer for their baby Neve, NZ Herald reports.

Ms Ardern and Mr Gayford, along with their baby, are travelling to New York today for Leaders' Week for the UN General Assembly.

The prime minister says that she will be paying for her partner's flights, since there are not many engagements for partners.

"There is no spousal programme for this, so we just made a judgment call that we would cover his travel for this trip. He will be going to some things, but he's primarily travelling to care for Neve."

After Ms Ardern became prime minister, the guidelines for ministers' overseas travel were reviewed and changed, reports the Herald.

Now, a minister with young infants is allowed to take someone, other than a partner, to care for that child or for a minister with a disability to take a support person if needed.

Ms Ardern said she never sought for the change and did not intend to use the entitlement for herself, and would only allow it for ministers in "exceptional circumstances."

The prime minister signs off on all ministerial travel overseas, other than to Australia, including deciding whether partners can travel with ministers and who pays for them.

Other ministers with young babies currently include the Green Party's Julie Anne Genter and Education Minister Chris Hipkins, whose partner had a second child this week.

Ms Ardern told the Herald she did not expect to have travel with more than one person, but if there was a situation which required both Mr Gayford and another carer for Neve, she would pay for that extra person out of her own pocket.

"We are playing it by ear. There is no set plan, it's just whether or not she's getting enough sleep, where I am for feeds. They might be with us a lot, they might just be in the hotel,” she said.

In New York, Ms Ardern is also staying in apartment-type accommodation rather than the usual hotel because kitchen facilities were needed for Neve.

Ms Ardern said she had made sure it did not cost more than was usual.

Jacinda Ardern, Clarke Gayford and baby Neve. Source: 1 NEWS