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Fonterra Cites Five Causes for Its Product Contamination Recall

September 4, 2013
Fonterra Milk Powder being bagged
  
 
 

The New Zealand dairy giant announces findings of its operational review involving last month’s botulism scare.

Source: Fonterra

Fonterra today announced the findings of its operational review, commissioned by Chief Executive Theo Spierings immediately following the co-operative’s recent precautionary recall.

Spierings said that the precautionary recall was not the result of any one single cause, but rather was the result of a number of separate and unrelated events occurring in an unforeseen sequence.

"I commissioned the operational review, led by our Group Director of Strategy, Maury Leyland, to find out what happened and why, and to understand what actions we can take to prevent this from happening again," Spierings said.

"The Operational Review has enabled us to strengthen our systems, while continuing to process this season’s fast-growing milk flows," he added. "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."

In summary, the findings are:

• 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 our 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.

To help prevent an incident like this from happening again, Fonterra is implementing a number of improvements which will:

• Ensure our world-class food production standards continue to be maintained at all times, across all sites, in areas such as quality control, testing, and product specifications.
• Further increase the business’ focus on quality and safety across the end-to-end supply chain.
• Increase transparency, internally and externally, to improve information flows and the speed of escalation.
• Ensure Fonterra strengthens its product recall and supply management systems which allow the tracing of all product that is in its control, and collaborates with customers on how to link different supply chains and quickly trace products.

"We are well underway in implementing these improvements," Spierings said. ""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.

"Shortly prior to the recall, we had upgraded the computer system in some of our sites, and had yet to complete comprehensive training, which affected the speed at which we were able to trace product," he said. "We have now completed this training and are confident that our people can use this system to efficiently trace products across our entire supply chain."

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