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Current as of 24/10/14 07:40PM NZST

Simon Collins

Simon Collins is the Herald’s social issues reporter.

Milk of human kindness

Fonterra is embarking on New Zealand's biggest ever act of corporate philanthropy — but is it an uncontrolled experiment? Simon Collins reports

Six-year-olds Cooper Duff, Natalie Welch-White and Vadem Quelch enjoy their free milk at Whangarei's Kamo Primary School.  Photo / Natalie Slade
Six-year-olds Cooper Duff, Natalie Welch-White and Vadem Quelch enjoy their free milk at Whangarei's Kamo Primary School. Photo / Natalie Slade

Kids at Kamo Primary School at the northern end of Whangarei are split down the middle over an offer of free milk from New Zealand's biggest company, Fonterra.

"I have it most days because it tastes really nice and I know that it's healthy for you," says 6-year-old Natalie Welch-White.

But Paige Hewson, 10, doesn't like the taste and won't drink it.

"When we first got it, it had chunks in it. I think it was in the fridge too long," she explains.

The school of about 400 children is rated a middling decile 5. When Fonterra started offering children 250ml of Anchor Lite milk in term 2 last year, teachers encouraged every child to try it. But the numbers drinking it dropped away quickly until they stabilised at around 40-45 per cent.

Jorja Gotz, 9, didn't drink it last year but says, "This year I started to like it. Most of the boys do have it. Some girls do, about five out of about 13 in our class."


A gigantic gamble

On the basis of this kind of mixed experience in Northland, Fonterra is now offering a free carton of milk a day to every child in years 1 to 6 of every Kiwi primary school, from the poorest rural hamlet to the richest private school.

As an act of corporate philanthropy, it dwarfs anything this country has ever seen. Social responsibility manager Carly Robinson says it will cost the company $10 million to $20 million a year.

That's two or three times as much as the $6 million a year the Government is spending on rheumatic fever. And the rheumatic fever programme ends in three years; Fonterra, by contrast, is investing for the long haul.

It has spent $8 million expanding its Takanini ultra-high temperature (UHT) plant, which will pack the milk in long-life cartons for schools, creating 20 new jobs at the plant.

A further eight people started at its Auckland headquarters last week as "onboarding teams" to work with each new school joining the scheme, starting in Southland this month and moving gradually northwards.

Every school will get a free fridge, made by Fisher and Paykel at East Tamaki, and a free recycling bin, made at another East Tamaki factory, Sulo Talbot.

Local milk distributors will deliver milk to each school and collect the used cartons for recycling - actually sending them to Thailand because there is no recycling plant here.

By late February, 1255 of the country's 2052 primary schools, with 202,200 or 58 per cent of all primary-aged children, had either started getting free milk (in Northland) or registered interest in joining the scheme.

Dairying regions such as Waikato and Taranaki and South Island areas that will get milk first have signed up in greatest numbers. Interest is lowest in Auckland.

Surprisingly, early registrations include as many children in the richest three deciles (61,360) as in the poorest three (60,040), although they represent only 45 per cent of children in the richest against 66 per cent of children in the poorest because high-decile schools have bigger rolls on average than poorer schools.


Why are they doing it?

If any single business could be described as NZ Inc, it would be Fonterra.

It is owned co-operatively by 95 per cent of Kiwi dairy farmers.

But its dominance makes it politically vulnerable.

Smaller dairy companies lobby politicians to lower the price they pay Fonterra for milk and there has been a growing consumer backlash against high milk prices.

In 2011 the Commerce Commission investigated, followed by a parliamentary committee, then last year Parliament legislated to require the commission to review milk prices annually.

Meanwhile, Dutchman Theo Spierings arrived in September 2011 to replace former Fonterra boss Andrew Ferrier.

He announced the Northland trial three months later, reviving a free milk scheme that was funded nationally by taxpayers from 1937 to 1967.

"Theo took the view that he wanted to improve the reputation of Fonterra in the eyes of New Zealanders," says Consumer NZ chief executive Sue Chetwin.

He also wanted to reverse a decline in local milk consumption dating back to 1974, when the Government began phasing out a subsidy that had held the price at 4c a pint for decades. The real price of two litres of milk leapt from $1.75 in 1979 to $3.29 in 2009.

This week, two litres of Anchor Lite milk online at Countdown cost $4.15, compared with $3.67 for 2.25 litres of Coke.

Milk consumption plunged by a third, from 139 litres a head a year in 1974 to 94.6 litres a head in 1997, when official statistics ended.

Robinson says consumption has fallen by about 1 per cent a year in the past six years. If that was true since 1997, consumption might now be down to about 81 litres a head, roughly where it was when the milk subsidy started in 1942.

When he announced in December that Fonterra would roll out free milk nationally, Spierings said he wanted New Zealand to be "the dairy nutrition capital of the world" - a model for the company's global markets.


Why we need it

In the 46 years since milk was last free in schools, New Zealand has been transformed. All food subsidies have gone and, since 1986, we have had a goods and services tax, one of only four in the developed world that taxes all food at the full rate.

Economic priorities have switched from full employment to free trade and low inflation.

Welfare rolls have jumped from 2 per cent of working-aged people in the 1960s to 12 per cent. Those beneficiaries care for 22 per cent of our children.

Households who said they could "afford to eat properly" only sometimes or never rose from 14 per cent in 1997 to 20 per cent in 2009.

Patrick Andersen, who moved up from Christchurch after the earthquake to become principal at tiny Ngatoki School, an hour north of Kaitaia, says many of his 30 pupils lack milk in their diet.

"I have seen the size of them. With the younger children, it's stunted growth. I really think it's lack of protein," he says.

"Coming from Christchurch, which is a natural disaster, here it's a social disaster really. There is some work, but there are all the symptoms - domestic violence, alcohol abuse, drug abuse, all those things that come from no employment and no money."


Godsend for the poor

At low-decile Northland schools like Ngatoki, free milk is a godsend.

"Here kids will drink three or four or five a day," says Andersen.

At Mangakahia Area School northwest of Whangarei, assistant principal Rosemary Grieve can see the benefits in the children's faces.

"They look healthier, their skin is much better, they are focusing in class and they are not eating the junk food."

Kaitaia Primary School principal Brendon Morrissey says the combination of fruit in schools for all decile 1 and 2 primary schools, extra food from KidsCan and now free milk has lifted children's health and their school attendance.

"You notice little things, like the colour of kids' eyes, the state of their fingernails, the condition of their hair," he says.

"They are little things but they make the world of difference to the kids' self-esteem. If the kids' self-esteem is in the right place, they are far more receptive to learning."

Carol Smith at Kaikohe West School says that when the scheme started, a lot of children said, "We don't drink milk, we have juice or Coke." Now they drink less juice and drink milk at home as well as at school.

Kaikohe East School health co-ordinator Fredi Jarvis says children have stopped eating pies, their general health has improved and they are more focused in class. "I don't think we have the obesity that we used to have," she says.

Noema Paul, of Te Kura Kaupapa Maori o Ngaringaomatariki on the Kaipara Harbour, says her students' teeth are healthier. "Previously we had to have quite a few of them go to have their teeth checked on a number of visits. Last year there were not so many children having to go back and have their teeth checked."

Robert Clarke, principal at Whangarei's Whau Valley School, says fewer pupils are now sent to him for misbehaviour. "Since we had the milk those numbers have dropped off."

Bruce Crawford at Hikurangi School says children are happier in class and pilfering of lunches has dropped.

"It's just fantastic," he says. "I can't praise it enough."


Mixed in the middle

Results in middle and high decile schools are more mixed. Wellsford School withdrew this year after milk drinkers dropped from 70 per cent to 30 per cent by the end of last year.

Tauraroa Area School (decile 7), southwest of Whangarei, also pulled out after its numbers declined to a third of its 150 primary-aged students.

Dargaville Primary (decile 4) has stayed in, but deputy principal Danielle Te Waiti says numbers are down from 80 per cent to 30 per cent and a lot of milk ends up being fed to pigs. "Some kids only drink half the carton so we put the rest into a bucket and we have someone who has pigs and they collect it," she says.

But at another decile 4 school, Onerahi in Whangarei, principal Gerald Koberstein says milk-drinkers have stabilised at a bit above half. "Some days it's really high. The thing is, they know it's there," he says.

At decile 7 Waipu School, numbers dropped from 170 to 20 late last year, but have risen to about 60 after a new intake of pupils this year.

At Kaiwaka School (decile 4) numbers slid from 70 to 10 last year but recovered to 48 out of 91 after new principal Rosemarie Ellis started this year.

"I made a personal decision as principal to encourage the children to drink the milk," she says.

At Hurupaki, a decile 8 school of 370 at Kamo, numbers fell from 300 to 50, but are now back up to about 200. "We have liaised with our local milk supplier, a parent of our school, who said a lot of schools are doing it straight after lunch, so it's not in play time," says principal Margaret Holmes.

"It's having a settling influence on them when they come in after lunch."

She says Fonterra has learnt from experience. It is reducing its carton size to 180ml because 250ml was too much for small children; it has relaxed requirements to "do origami" with the used cartons for recycling; and it is replacing the big fridges it supplied initially, which chewed through the power bill and were "lit up like Vesuvius".

"They have listened," Holmes says.

Who will join?

Fonterra says all primary schools have been invited to submit expressions of interest. Two schools contacted for this article said they did not get the invitation and Robinson says they can still register via the scheme website. "There's no deadline," she says.

At Albany's private Kristin School, primary principal Wendy Hay says, "We are interested, but we want to make sure that no state schools will miss out because of us being part of it."

"That is very generous of them," Robinson responds. "But obviously no one will miss out, so if you want to, jump on board."

And that is what most schools plan to do. For schools in poorer areas such as decile 2 Manurewa East, there's no question. "The majority of our kids don't have enough protein," says principal Phil Palfrey.

The decision is also easy for some in dairying areas, such as Edgecumbe School in the Bay of Plenty. "Any help that comes our way from a factory that is in our town is really appreciated," says principal Tristan Brebner.

But for most other schools the issue is healthy eating. Jill Corkin, a principal for 12 years in Remuera, Pakuranga and now at Snells Beach School, says she has seen children's eating habits deteriorate.

Gavin Beere, at decile 6 Hillpark School in Manurewa, sees milk as "a foil for the low-cost fizzy drinks".

Only two schools in this survey plan to opt out: decile 10 Beachlands School near Howick, which doesn't "see it as a particular need", and Parkside Special School in Pukekohe, whose disabled pupils are not all able to drink unaided.


An experiment?

Otago University nutritionist Professor Winsome Parnell, who led a survey of children's nutrition in 2002, worries that the Government has not funded the repeat survey that had been planned after 10 years, so there is no baseline from which to assess the Fonterra scheme.

"We have, in effect, an uncontrolled experiment," she says.

"In the full context of obesity in children, I'm not sure it's been thought through. There has not been any robust discussion of the impact of adding food to children's diets."

Fonterra asked Auckland University in February last year to evaluate its Northland pilot, but its report measured only how often children drank milk at three schools. It found that those drinking milk seven days a week increased from 53 per cent before the scheme to 66 per cent by September. Other experts are unconcerned. Massey University nutritionist Dr Carol Wham says there is no obesity risk in a 180ml dose of light blue-topped milk.

Robinson, herself a mother of two children aged 18 months and 3 years, says she is talking to experts about evaluating the health and educational effects of the national scheme, but she believes it "will speak for itself".

"We are not sitting here saying we need an evaluation to assess whether we do it or not,"she says.

"We are in it for the long term. We won't see results after a year.

"As a mother, I know that if you feed kids good food there is an almost immediate effect and if you feed them high [levels of] sugar or Coke you are in trouble and manners go out the window. So no hard evidence - but the best evidence in the world."


The timetable

2012
Northland (trial).

2013
Term 1: Delivery starts in Southland.
Term 2: Delivery to rest of South Island; Waikato/Bay of Plenty schools invited to join.
Term 3: Wellington/lower North Island schools invited.
Term 4: Auckland and remaining regions invited.

2014
Term 1: Delivery to all New Zealand schools by end of term 1.

- NZ Herald

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