Fonterra “shocked” by findings of Chinese court

Posted by Daniel Palmer on 27th January 2009

The world’s biggest dairy exporter Fonterra, which owned 43 per cent of Sanlu Group – the company at the centre of China’s melamine scandal, has advised of their shock at the alarming findings of a Chinese court, which last week sent the former Chairwoman of Sanlu to prison for the remainder of her life while sentencing two others to death.

Another who was involved in the deliberate contamination milk powder, which lead to the deaths of at least six infants and almost 300,000 illnesses, was given a suspended death sentence.

Fonterra’s CEO, Andrew Ferrier, advised that the company had refrained from making any comment on the criminal proceedings in China until he had had the opportunity to review the findings of the court. “It would have been irresponsible to comment on the published verdicts without first establishing a full understanding of the court’s decision,” he suggested.

Fonterra accepted the findings of the court, Mr Ferrier said, but opposed the death penalty.

“We have been shocked and disturbed by the information that has come to hand as a result of the judicial process,” he added. “Fonterra deeply regrets the harm and pain this tragedy has caused so many Chinese families.”

Mr Ferrier said he wished to reiterate very clearly that Fonterra had no knowledge of the criminal actions taken by the four San Lu managers.

“We certainly would never have approved of these actions,” Mr Ferrier reported. “As we have stated throughout, Fonterra consistently pushed for a full public recall of contaminated product from August 2 when we learned of the contamination. Additionally, Fonterra clearly communicated both verbally and in writing to San Lu that its product must contain no melamine.”

“I am appalled that the four individuals deliberately released product containing melamine. These actions were never reported to the San Lu Board and fundamentally go against the ethics and values of Fonterra,” Mr Ferrier concluded.

Fonterra has now written off its $200 million investment in Sanlu, with Sanlu last month filing for bankruptcy.