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Fonterra announces findings of operational review following product recall

September 5, 2013 • World News

Dairy company Fonterra has announced the findings of its operational review on Wednesday following the company’s recent precautionary recall of dairy products.

Image courtesy of Detanan / FreeDigitalPhotos.net

Image courtesy of Detanan / FreeDigitalPhotos.net

Chief Executive Theo Spierings commissioned the review and said the precautionary recall was not attributed to any single cause but rather to a number of separate and unrelated circumstances which occurred at an unforeseen sequence.

Fonterra released the findings in a statement released via ASX. In summary they are:

  • The decision to reprocess the original WPC80, in combination with the use of an item of non-standard equipment, was the cause of contamination.
  • A one-off lapse in information sharing across two parts of the business led to delays in testing
  • The issue should have been escalated to CEO-level earlier
  • Longer product tracking due to a major upgrade in the computer systems in some sites
  • The size and complexity of the WPC80 recall is a huge factor since the product itself has become an ingredient in the products of multiple customers

Mr. Spierings said the operational review has enabled Fonterra to strengthen their systems while continuing to process this season’s fast-growing milk flows.

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

Fonterra is implementing a number of improvements which will ensure that their world-class food production standards stay in place at all times and strengthen their product recall and supply management systems. They will also increase transparency both in and outside the company, and increase their focus on quality and safety across the end-to-end supply chain.

The company has already created a new role of Group Director of Food Safety and Quality who will report directly to the CEO and launched a hotline for staff and contractors to easily bring forward any concerns about potential food safety risks.

Fonterra also plans to carry out a comprehensive review of their traceability systems in their global business. They are also introducing additional authorisation requirements for non-standard processing and testing, and are conducting specialised audits of their global manufacturing plants and product quality standards.

“We are well underway of implementing these improvements,” said Mr. Spierings.

“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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