Of course it is an overreaction. It’s bloody ridiculous

Why do we always go off the deep end when these things happen?

As New Zealanders move on from Fonterra’s botulism food safety fiasco, disillusioned Chinese people are cancelling their plane tickets to this country.

While Kiwis’ faith in Fonterra is bruised, China’s trust in New Zealand is shattered, say experts in the culture of our biggest export customer.

“The injury is very deep,” says expat David Mahon, a veteran investment adviser in Beijing.

“People have cancelled visits to New Zealand because it is not 100 per cent pure,” says Massey University associate professor of marketing Henry Chung, who has studied the Chinese market for more than 20 years.

“After this event, the Chinese consumer and the (Chinese) government cannot tolerate any more. If anything happens again, any explanation will be considered redundant.

“This is the last chance to get it right.”

This just defies all logic.

Food recalls happen all the time.  But only if it happens to Fonterra, and when nobody even got a slightly upset stomach, let alone died, the whole country’s exports are on notice?

I call bullshit.

There is, so far, no health crisis. But it seems our relationship with our biggest export market, which accounted for $2 billion of Fonterra revenue last year, is on a knife edge.

Chung and Mahon say the reason is simple: Fonterra IS New Zealand, and New Zealand and China had a unique and long relationship.

Mahon says: “New Zealand has been trusted more than nearly every other OECD country. We were in a special category and have been viewed that way since 1949 (the year of the communist revolution).”

“There is an unbroken relationship of trust that New Zealand was different. In the space of 12 months we have managed to unravel that. ”

Chung, who migrated to New Zealand from Taiwan 20 years ago, says Chinese people are very aware that New Zealand was the first country to recognise their government, and the first country with which they signed a free trade agreement.

“People in China are asking a very interesting question – ‘if New Zealand [product] is no good, who else is good?’. That is being asked by a lot of consumers.

People.

Well, I have news for these Mahon and Chung traitors:  “People” in New Zealand think you’re full of scaremongering shit.

 


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • middleagedwhiteguy

    Not one person got sick, let alone died. The recall started a few days after results were confirmed. The chance of anyone getting sick was one in millions. Remember, there are bacteria in all food and all dairy product. Try making cheese without bacteria and see where you get.

    What I see is a company when faced with a miniscule chance of someone getting sick, put that person against the loss of millions in revenue, and acted accordingly, yet the MSM have defaulted to hysteria with no thought to the consequences.

    Imagine if the headline was Fonterra places customer safety before dollars.

    • BobaJob

      ‘Try making cheese without bacteria and see where you get.’

      Fonterra’s latest product offering? – (sorry MAWG, couldn’t help myself! :) )

    • BobaJob

      On a serious note – yes hysteria sums it up well. So we NZ Inc need to keep a calm head. The smoke will clear and any reasonable consumer will agree with you, no one got sick or died and a greater degree of honesty was shown by NZ around this issue. If it’s handle right we’ll come out of it looking good – and maybe even getting more trust from the overseas consumers.

  • GazzW

    For whatever reason I suspect that Chung & Mahon are pushing their own agendas. I think that I will await advice from Tim Groser and his trade gurus before throwing myself off the harbour bridge.

    • BobaJob

      I didn’t know much about TG till this thing – But he has certainly impressed.

  • BobaJob

    Babies and death don’t go together. It can’t be logic’ed away. It’s a primal human response. Nothing actually has to happen – it scares people. Its not helping that Fonterra exec’s appear to think that they are ‘in the clear’ now when they have scared so many people around the world.

    • middleagedwhiteguy

      Do you think Fonterra execs have scared people, or do you thing the media’s reporting had more than a little to do with it?

      • BobaJob

        Well we all know the MSM love a scandal. But the ‘customer service experence’ Fonterra is giving isn’t good. It is not very clever to tell a angry customer(s) to calm down – even if the customer should! or hey your over reacting to that. That like putting a red rag in front of a bull I reckon…

      • Patrick

        & at some stage the media’s role needs to be examined, all very well exposing the issues but they play a dangerous game when the ultimate loser is NZ Inc.

        • Whafe

          As I said earlier, the NZ media, specifically NZ Horrid forgets the importance of Fonterra to the NZ economy, NZ is fucked without Fonterra.

          I am not for a moment saying Fonterra are perfect in anyone, am coming from the view point this is a beat-up, by China and some of our own media..

          • Muffin

            Why didn’t the nz media take a more defensive attitude on behalf of nz, pointing out the small chance if infection, steps being taken etc. rather than all rush to help destroy our biggest company

  • kevin

    Think of the whole over reaction as a negotiating tool… my money would be on a ‘discount’ being negotiated with Fonterra by the Chinese.

    • GazzW

      Of course it will Kevin and who could blame them?

      • kevin

        Will all be revealed regarding re-negotiations with Fonterra/China I wonder?

  • La la land

    I agree – people in glasshouses shouldn’t throw stones… These Chinese are getting a bit OTT considering their own health and safety record.

  • LesleyNZ

    When you go to China or Hong Kong the advice is – don’t eat anything from street vendors and be careful which restaurants you eat at and I add – try to check out the kitchen before you eat. Is this advice given to tourists who visit our country – I don’t think so. I do not believe there ever was a health risk of botulism. It was most likely all over by the time we heard about it. Because something was found not to be right Fonterra had to go through a process – which has now resulted in what you are describing above. The Chinese need our milk powder. Their babies will just have to starve then or mothers breastfeed for a much longer time. Makes you laugh at these traitors – think about all the faulty products you have to return these days – because they are made in China. The world is not perfect – China should be the first country to accept this. Only when China cleans up their filthy dirty rivers and filthy dirty air – and improves their human rights record – then they can point the finger at us.

    • GazzW

      Lesley & La la land – suck it up, this isn’t personal. The customer is always right particularly when he’s your biggest customer. The fact that the PM and Tim Groser were prepared to fly to China immediately if they had to says it all. The Chinese record on health and safety is totally irrelevant to this issue.

      • LesleyNZ

        Never said it was personal but if Chinese tourists are cancelling their holiday here over milk powder – then it has got personal. Show us numbers Chung & Mahon – how many are actually cancelling their trip here over milk powder? Chung & Mahon are scaremongering and makes you wonder why. Perhaps to better their position in the eyes of the Chinese community?

        • 4077th

          Agree Lesley, show us the facts and the numbers Chung and Mahon.

  • SJ00

    “people” are cancelling their plane tickets to this country? Because of a baby formula product recall? I know air travel is fairly easy now but “people” tend to plan trips out months and years in some cases in advance. You don’t just up and cancel a major trip (NZ is at the arse end of the world, its not easy to get here) because of baby formula.

    I’d like to see some numbers there Mr Chung. I bet one or two “people” cancelled their trip and he is blowing it out of proportion. In one or two months time, China will again be stocking baby formula sourced in NZ and “people” will still be coming here.

    How about when the next POS from the Warehouse gets recalled we run major newspaper stories and make a big giant deal out of emptying the shelves and have some sad faces on tv worried about everything. We can show airport queues that don’t exist. We can highlight Chinas pollution and low wages. We can say the whole of Chinas exports are threatened because my toaster doesn’t toast anymore.

    • Cadwallader

      The msm doesn’t worry about numbers and facts, why bother when they can engender panic through their ridiculous half-measured/half invented claims?

  • Phar Lap

    Let us not also forget .At every twist and turn the bottom feeders from so called “green party” Russel Norman and his female offsider called Turei are forever putting the boot into NZ inc especially the farming community.

  • Arnie

    This is the result of the unadulterated, exaggerated crap that the News Media put out. Why let the facts get in the way of a good story.

  • Harroputza

    With the predicted drop in Chinese demand, can we expect a drop in dairy prices at the supermarket? Unlikely…

    If Chinese businesses try to knock money off the price, tell them to fuck off and let them find their own food somewhere else. There’s plenty of other countries that will buy our food if they don’t want it. Perhaps Fonterra should leak something about negotiations with India or Brazil or Japan and see how long this charade of hurt feelings and broken trust lasts.

    My advice to Fonterra (if they’re not already doing it) is get some Chinese (or at the very least Asian) people in the team who understand the mindset of these people regarding haggling and discounts. My guess is it’s a largely unfamiliar concept to a lot of Kiwis.

    • Mediaan

      No, don’t try to pay tough with China. They are a powerful and wise customer, and wll correctly use their advantages. And nobody from Taiwan is an expert.

      NZ needs fewer foreign CEOs of big export companies, and none at all for food exporters.

      Local people will have local NZ values. That’s what we want.

      Theo Spiering has worked very competently as it seems, but I can’t quite trust him to promote NZ values when he is Dutch (also a dairy exporting country).

    • philbest

      One of the underlying problems here is that when you export stuff to do with primary produce you are mostly a “price taker” on global markets. Most countries can produce their own now. Even if you have a “quality brand” premium, this is on top of a falling real base value on global markets. International terms of trade for primary produce have fallen fourfold in the last 6 decades.

      Paul Callaghan was right, and indeed NZ should have been looking to diversify decades before he started making an impact.

    • Muffin

      I don’t know, the Dutch have a reputation for negotiation as well. Tighter than a nuns…..

  • Hazards001

    What crock of shit.

    I’d put dollars to doughnuts that when I go to do my shopping this afternoon I’ll get to stand in a queue behind a bunch of elderly Chinese here on the one child policy, each with the 6 max per customer of baby’s milk formula (a policy introduced by the supermarket to stop them stripping the shelves like locusts and leave some for the communities mothers) all purchased to be boxed up and sent to Chine for sale at a massive profit.
    The media have done nothing but blow this all out of proportion. Although I’ll accept that it was badly handled. Once more our corporates being run by foreigners with no idea of Kiwi culture and values.
    Time to stop sinking the boot on this issue and move on (not saying a few heads shouldn’t roll in Fonterra but that’s their business).

    The product has been recalled and no one got even slightly ill. Thankfully.

    • kehua

      I agree , who needs enemies when we have our very own homegrown media, I am sure that the billion or so Chinese have so little in their lives that they, crave the bleating of the NZ News Media who manage to interview a dozen or so people in China.

  • Whafe

    It is indeed an over reaction, BIG time… It is to be expected for the Chinese to blow this out of proportion… It is about business, which is BS…

    My beef is just how much the likes of the NZ Horrid blow it out of proportion… You would think they would like to see Fonterra gone from NZ.. Well fuck wits at the NZ Horrid, NZ wouldn’t have an economy if there was no Fonterra, it is as simple as that…

    • philbest

      Fonterra is probably equal to the top 30 manufacturing exporters combined. So at least we still have the latter.
      Paul Callaghan used to argue that if NZ could treble the manufacturing exports it would put us up with Sweden and Germany. Frankly, that is how nations actually get wealthy these days. Primary produce just “pays the rent”, that’s all.

  • johnbronkhorst

    “Fonterra IS New Zealand”……WTF???? My supplier seems happy with me!! He will continue to sell to me!!
    SO since a trade agreement is a 2 way street, I believe this hysteria (generated largely by very labour/green sounding people) will blow over and pragmatism will out!
    China wants to feed it’s people, NZ wants to become wealthier!! SIMPLE, fix this problem (small error) and get on with it!

  • DLNZ

    My theory behind all these overreactions is that its a way for places like China and Russia to force people to “buy local”. Fonterra has/had a high reputation and Chinese are quite happy to pay top dollar for NZ product. Any bad publicity only works to benefit their local economy because any bans will mean people have to buy local.

  • steve and monique

    I would think most Chinese are not that stupid. Sure they have had one bad dose of baby formula,which if my memory serves me was the factory in China adding crap to make it go further,and make more money. People writing/reporting claims which are likely unfounded are more risk to this country,and its reputation,then a batch of milk powder.

  • cows4me

    The Chinese will wheel out their useful idiots soon. They are playing this for all it’s worth. Remember the protest a while back when Japan and China were arguing over some islands. Protesters took to Japanese dealerships like Toyota and trashed Japanese goods will the police stood by and watched. In fact the protests were seen as Nationalism by their government. They are playing the same game here but it’s not nationalism but extortion. We’ve helped these people too much already, with agricultural technology and dairy stock. Enough of their bullshit , it might save a lot of grief just to walk away.

    • Patrick

      Honest question – what would be the impact of that? I read $2 billion is the size of Fonterra’s market in China. Can the product be sold elsewhere? What would be the drop in payout for the Cockies? What is the potential for the Chinese market in 10 – 20 years?

      • kehua

        1 Fuck all. 2 Correct. 3 Not in this quantity. 4 Nil. 5 Huge.

  • Hb

    I work for a commodity exporter and we sell a lot to China. The Chinese will pick on any fault and threaten to cancel all future orders unless they get a refund or substantial future discount. Our useless marketing team cave in every time usually even when it is proven to be within spec, I suspect so there next jaunt overseas is cruisy and they don’t have to have any awkward lunch or dinner conversations with the customers. We are very naive in NZ, the Chinese have been trading for thousands of years and if they didn’t invent every trick in the book to get the best deal they sure know them.

    • kehua

      Depends on the product Hb.

    • 4077th

      I work directly with our dealers in China and I emphasize dealers plural for very good reason. We are very lucky in that we choose not to discount our product but there have been occasions when “a customer” considered our product faulty on 2 consecutive occasions and in both cases we replaced the items at no small cost I might add. The goods returned were in perfect working order. Net result…”the customer” though they now had leverage due to poor previous performance and that leverage was in the form of substantial discounts. We tested the returned kit exhaustively and concluded there would be no discount.

      Their next move after we denied the discount was to approach every other dealer we have around the globe. Fortunately our dealer network is very loyal (except Singapore as it turned out) and these requests were routed back to us. Our solution to this was to appoint 2 other dealers in China. The result was the dealers 30 to 40% margin was cut and the 3 of them fought for the business. As a reseller, average margin is around 10 to 15%. Our original dealer was creaming it at 40% so now the customer has a discount and we as the manufacturer have not given away any margin and we have expanded our dealer base.

      The Chinese are smart but they are not always smarter than us. They are just Asian versions of us after all. Kiwi business people are far more savvy than they were a few years ago. We come into contact with Chinese business people in our every day lives far more often than many other countries and this gives us a slightly better edge over much of the rest of the world and we should take advantage of that. Fonterra did a bad job of that some time ago with the Melamine scandal. Have they learned any lessons from that..absolutely..never trust them in business! This latest round and the resulting reaction from “the Chinese” is merely a reflection of that level of mutual mis trust. Is that a bad thing..? No not in my opinion. Better to be careful and go in eyes wide open that eyes wide shut.

  • Patrick

    So a Chinese person living in toxic China having to wear a face mask all day long is cancelling their plane ticket to NZ because we are not 100% pure? Yeah right. Methinks Messrs Mahon & Chung are pushing their own barrows on this one.

  • Anonymouse Coward

    The satire “On the List” broadcast on National Radio this morning skewered Fonterra and the hoo-ha surrounding the scare.

    I particularly enjoyed the part where the dialogue contained a series of puns on the word whey.

  • AnonWgtn

    This kind of Botulism is found ONLY in soil.
    Ask any Microbiologist.
    What bugger picked it up off the ground and stuffed it into the Whey ?

  • Col

    Mr Chung, your from Taiwan, stop your bullshit.
    Mr Mahon, what source did you get the info from, bullshit.
    I have spoken to friends in PRC over the last week and what these 2 idiots have said is Bullshit. I did hear on the radio today a NZer in Shanghai said that all is ok and the Chinese people are ok with NZ product. They believe that the papers in PRC are just trying to push local product, but the people don’t want a part of it. Old saying the front page of a news paper is all bullshit in PRC, the only thing that may be true is the Date.

    • Ducky

      Absolutely agree with you, people visited this country because they wanted to see the beauty, not Bloody buy Fronterra’ product .just because 1 idot from Taiwan says so, doesn’t meant NZ is coming to an end. If Mr Chung does not like it here, perhaps he can pack his “safe” bags and head Safely to his beloved Taiwan. (p.s I am an Asian import too) but I loved NZ.

      • Col

        Not all but some Taiwan people still hate Chinese politics, but ok with the people, Mr Chung is older and carrying this on his shoulders.

  • Mediaan

    Excitable bullshit is right.

    NZ Farmer which carried this excitable article is strongly influenced by the Fultons, who seem to be very allied with Anglo-Dutch Shell, an English-Dutch conglomerate. Spiering is Dutch.

  • fozzie2

    The problem here is Fonterra’s handling of what could have been a very serious issues -their ever changing story – now the ‘dirty pipe’ is an engineers term !

    Several years ago I ran a small business. where testing of all source materials for a range of bacteria was a must. All batches of source materials were tested and quarantined until cleared. We had a zero tolerance of any growth. Any sign of problems and the batch was set aside retested and if necessary destroyed – never went anywhere near our distributors or customers ! I think Fran Sullivan’s piece says it all http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10910691
    In this case it is the coverup that is the real story …. we should ensure the why is answered

    • 4077th

      My 2c is Fonterra have never had a formal worst case scenario plan. This IS the reason why they appeared so disorganized.

      • fozzie2

        It is clear there was no crisis plan – which for an organisation the size that it is is baffling. When you are manufacturing foods and medicines, the quality and safety of your product is paramount. GMP (good manufacturing practice) is a core standard with testing and control and traceability. Watching the Fonterra train wreck unfold over this past week has been a PR disaster. First get you story straight. On commentator thought this was maybe a one off aberration … Fonterra’s behaviour would suggest a far more systemic problem. If the media is over reacting then Fonterra only have themselves to blame – front up and tell the truth !

    • Ducky

      Does that mean the whole of NZ is contaminated?
      It is a food exporter just as China and the world exports other things that may be contaminated, tourists still travel to that part of the country. I travelled to some countries that have the worst food scenario, but I wanted to see the country, not buy Fronterra’s products.

  • SJ00

    Seems China are still happy to want to talk to me.. I received this email overnight. Note I haven’t edited this at all. Also note I’ve never spoken or dealt with them before. Yes I know this a bulk emailing to drum up business but it cracks me up.

    Dear

    woo….What a long time since last time we contacted .

    How are you getting on ? Here is queenie from China Zhicheng door closer factory which professional in hight quality hydraulic hinge
    and gas spring . and drawer slide .

    Before i have sent many mails to you .,But get nothing from you ,
    have the impression to me ?

    Pls continue support me for my job,

    You know , i am alway very happy to service and quote for you .Weclome .

    Best Regards

    Queenie Liang

    Overseas Department

  • 4077th

    As per Travis last week..Death count = 0

  • Bryan

    just as the chinese have played it for their own ends the media here have also played it and hit the Govt over the head for the same reason their own ends and shown their complete lack of backing NZ and their political colour, but the bottom line is every one still likes milk with their tea and coffee its food and they cannot go without it for long and Fonterra sold 60000 tons last week that’s why they still need it regardless

  • Ducky

    What a crock of SHIT! I have friends from China who are STILL coming to NZ because they want to see this beautiful country, not because some UNINFORMED stupid prats trying to make a name/news of themselves and not getting any REAL FACTS.
    What happens with Fronterra HAS NOTHING to do with whether tourist comes to NZ or not, it is the sheer stupidity and IGNORANCE of some so called Prats trying to smear NZ ‘s name. I tell these arseholes to crawl out of whatever holes they are in and go F*#@ off somewhere else!.

53%