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Fran O'Sullivan: Memo to Fonterra - Improve your PR, share the pain

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Fonterra chief financial officer Lukas Paravicini on the Paul Henry show, where he was grilled over payments to suppliers.
Fonterra chief financial officer Lukas Paravicini on the Paul Henry show, where he was grilled over payments to suppliers.

A Winston Peters press release shared through LinkedIn zeroed in on the extraordinary own goal by Fonterra chief financial officer Lukas Paravicini on the Paul Henry show.

It brought into focus how former Fonterra senior executive Gary Romano's career at the dairy giant came to an end after a less than stellar television performance when the false botulism affair broke.

There is no suggestion that Paravicini - who found himself on the end of a focused inquisition over Fonterra's move to delay supplier payments - will end up in the same position.

Chirped the NZ First leader: "Yet again Fonterra's chief executive has thrown a senior member of his management team under the media bus.

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"During the false botulism scare in 2013, it was Gary Romano shredded on Campbell Live and only today he put his chief financial officer on to the Paul Henry show.

"Just where is Theo Spierings, whose huge salary has built a corporate culture of 'the buck stops over there'. The milk price has plummeted and Fonterra's debt has exploded but its Fonterra staff, shareholders, suppliers and communities like Kaikoura, all feeling the pain."

The brute reality is that Paravicini was unconvincing.

It was always going to be a "lose-lose" situation after Henry prised an admonition from John Key earlier in the week that Fonterra should be paying its suppliers on time. But Paravicinci - like Romano before him - was not adequately prepared for his "in the headlights" moment.

He endeavoured to use logic. But after two weeks of rolling media coverage, with supplier after supplier telling their hardship story, logic wasn't going to cut it.

In truth, it is hard to put "lipstick on the pig" - a reality which Fonterra's public relations team should have taken on board.

They should also have fronted a media executive earlier rather than allowing public disquiet to snowball.

Spierings' absence from the fray has resulted in him facing criticism.

But a CFO - particularly one who some Fonterra directors consider would ultimately be in the mix for the CEO's role when that is next contested - should be polished enough to handle himself on television.

Fonterra chairman John Wilson should prepare himself well for questions on this score at Fonterra's results presentation next Wednesday.

As Weekend Herald Business reveals today, Fonterra is developing an offer for suppliers to take a price cut in order to get paid faster.

This won't be enough to cut it on the PR front. Fonterra's farmer shareholders and suppliers are taking a large haircut as the dairy slump continues. If Wilson and Spierings want to turn the PR tide back in their favour, they should follow suit.

A voluntary cut to directors' fees and Spierings' pay would go a long way to reducing stakeholder anger.

An earlier version of this column incorrectly said Gary Romano circulated the press release via LinkenIn.. That is not the case.

Fran O'Sullivan retracts the comments and apologises to Mr Romano for unfavourable inferences.

Debate on this article is now closed.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

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