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THE NEW ZEALAND Market Disciplinary Tribunal says Fonterra breached its rules by not releasing information to the markets as soon as was aware of potential contamination of product during last year's false-alarm food safety scare.
Fonterra disagrees with the tribunals findings, but has agreed to a settlement of $150,000.
The tribunal says Fonterra should have told NZX as soon as soon as it was aware of results from AgResearch testing of potential botulism contamination on Wednesday, July 31, 2013.
Instead it told NZX after midnight on Friday, August 2, after the markets had closed.
After a massive international recall of three batches of whey protein concentrate WPC80 manufactured at Fonterra's Hautapu plant, the Ministry for Primary Industries announced on August 28 that further conclusive testing showed the batches did not contain the botulinum strain of clostridium and that the affected product posed no risk to the public.
Fonterra's group director governance and legal Mike Cronin says Fonterra had co-operated fully with the NZX and the NZ Markets Disciplinary Tribunal throughout the investigation.
"As part of a full and final settlement, we have acknowledged the Tribunal's views and agreed to make a payment of $150,000.
"Following the Fonterra board's independent inquiry into WPC80, and as the tribunal's statement sets out, Fonterra has made significant changes to ensure improved identification, management and escalation of emerging risks across the cooperative, with a particular focus on food safety and quality.
"Fonterra remains committed to fully complying with the rules governing the Fonterra Shareholders' Market and the NZX listing rules," Cronin says.
The Tribunal says in its findings that while Fonterra cooperated fully with the inquiry, it was "concerning and disappointing" it has not accepted a breach of rules had occurred.
"The tribunal also records that Fonterra could have managed its compliance with continuous disclosure obligations better in this case," it says.
"The tribunal reinforces the need for organisations, and particularly those of the size and standing of Fonterra, to devote proper resources, time and training to their continuous disclosure obligations and to foster a culture of openness and transparency in relation to continuous disclosure issues."
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
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