Crisis hits in midst of PR shakeup

Sir Henry van der Hayden negotiated a new PR deal. Photo / Richard Robinson

Fonterra aimed to take more control of communications strategy.

The baby milk botulism scare comes to light after changes at the top of Fonterra - including moves by the company to take more direct control of its communications strategy.

John Wilson was appointed Fonterra chairman in December last year and his predecessor, Sir Henry van der Hayden, stepped down from the board two months ago.

It is understood that before van der Hayden stepped down he negotiated a new contract with Fonterra's long-time outsourced public relations provider, Baldwin Boyle Group.

Baldwin Boyle principal Brenda Baldwin declined to discuss the terms of the contract and Fonterra communications boss Kerry Underhill did not respond to calls. However, it is known the board backed a five-year contract that took effect from February 13.

Fonterra has been criticised for its handling of the latest crisis, partly for the timing of when it told consumers and for its communications.

Fonterra has claimed that issues with communications are because of the fast-moving events. But another public relations consultant, Neil Green of Senate Communications, said that after past experiences "you'd think they would have been well schooled about how to handle [such an event]".

The event was one that a food company like Fonterra should have prepared for with practice runs every 12 months, Green said.

There have been disruptions for Fonterra's communications operation.

One month ago Fonterra appointed Kim Underhill to be head of communications, and he has been the face of the company while the board has kept a low profile.

He replaced Louise Nicholson, who had held the post for only a few months. Before taking up the staff post she previously handled the role as a partner at BBG. Nicholson had stepped down from BBG and left Fonterra.

According to a well-placed source who worked within the marketing operations at Fonterra in the past, BBG previously had a direct relationship with the board.

However, one issue was that the board was more focused on being a farmers' co-operative than a global food company, the source said.

Marketing issues were left more to advertising agencies for individual markets.

Baldwin Boyle is one of the nation's more venerable public relations consultancies and is steeped in the tradition of press-oriented corporate relations. According to its website: "Our advice is always based on ... the broader social, cultural and economic environment in which they operate."