Ex-Dairy Group chief slams 'muckraking'

By PHILIPPA STEVENSON and NZPA

A former Dairy Group leader is angry about "muck spreading" linking his old company to the Powdergate illegal export scandal.

Tony Wilding, Dairy Group deputy chairman until its merger with Kiwi Dairies to form Fonterra, has vehemently defended his former company against allegations of involvement in the exporting saga rocking the industry.

It was "very convenient" to suggest that illegal exporting had been rife in the industry, or symptomatic of behaviour under old rules, he said.

But "just throwing muck around and trying to spread the blame is not sending the right messages".

Fonterra chairman John Roadley, also a former Dairy Group deputy chairman, detailed allegations about Dairy Group in a letter to Fonterra shareholders this month.

As part of the process of investigating the illegal export of more than 9000 tonnes of Kiwi product worth $50.3 million, Mr Roadley said, Fonterra had sought assurances from other companies that there had been no other similar instances.

Dairy Group had responded that last season 794 tonnes of its product had been sold to two companies, Biocorp and Probiotec, and might have been exported without Dairy Board approval.

But Mr Wilding was adamant that Dairy Group's actions, volunteered in a spirit of openness, had been wrongly portrayed.

"We didn't want the inquiry to be completed and it be said that Dairy Group did not show its books."

The organisation could not be absolutely sure what happened to the product sold to companies with which it had no links, he said.

"You can ask all the questions but it's not our responsibility to make sure people have export licences.

"They know the rules and Dairy Group can only go so far in being the watchdog for the Dairy Board."

The company had sold only downgraded product, "carefully targeted to third-party sellers with the New Zealand Dairy Board's full knowledge".

Dairy Group had "no ownership or association with any offshore companies that further onsold such products".

The Powdergate transactions involving Kiwi products and several companies, including subsidiaries, on both sides of the Tasman were quite different, he said.

Mr Wilding is a director of NZ Dairy Foods, the domestic dairy marketer half-owned by Dairy Group, whose shareholding is being sold as part of the deal to set up Fonterra.

Meanwhile, former Dairy Board chief executive Warren Larsen said the board sometimes urged manufacturing companies to get rid of low-grade product, commonly sold as stock feed.

But while heading the board he had raised the illegal export of high-value milk products with the then chairman, Mr Roadley.

"The issue that I raised surrounded Kiwi alone. We're not talking about a few thousand tonnes of stock feed." He said the Powdergate investigation was central to the NZ industry's international reputation.

Feature: Powdergate