Quite rightly, the main news over Fonterra's infected products has been the physical threat to the customer. Or more importantly, the children of its customers.

Once the headlines recede - and hopefully no one dies - the more damaging effect to us collectively is economically.

A mate told me this week that his girlfriend's small milk product business to Asia was in effect destroyed overnight by Fonterra's public relations train wreck. She won't be the only one.

I have no doubt thousands of other people, and not just farmers, are going to be hit financially - now and over time.


We are led to believe that the titans who run our giant conglomerates are infallible gods. In the case of Fonterra, although it's owned by Kiwi farmers, it seems locals aren't up to sitting in the executive suite.

The latest chief executive has a strong Dutch accent. He probably doesn't know what a Swanndri is and I'm sure his suits are made of the finest European cloth. But he must be a genius. After all, why would they pay him $100,000 a week?

If I were a Fonterra shareholder I'd want my money back.

Would you be surprised if in a few weeks we find out that the cause of the infection was some miserly cost-saving measure foisted on the cleaning staff or contractors?

The 100 per cent Pure NZ brand was always opportunist marketing. The smugly branded clean image it projected was never actually true. Now it's being lampooned in international publications and many of our export businesses will be affected. The economic fallout could run into billions of dollars.

Every New Zealand exporter of foodstuffs will have their foreign competitors whispering to any potential client that our country's health and safety regulations are a bit shonky and fail to protect people.

What hurts is that it's true. The Pike River mine explosion is the obvious case where a corporation was allowed by the Government to ignore safety regulations - and 29 miners paid the price with their lives.

The Council of Trade Unions has been unsuccessful in trying to get the Government to intervene in the forestry industry where, in just five years, 23 foresters have been killed and nearly four a week injured, many seriously.


But you'd expect this Government to put workers' safety behind corporate profits. They don't seem to care about consumer protection either, though.

Remember the scandal of cheap Japanese imported cars when it first was exposed? After initially pretending it was only isolated rip-offs, the Government was forced to investigate. It found that the Japanese keep detailed records of their cars. It was soon evident that thousands of cars had had their speedometers wound back by tens and tens of thousands of kilometres.

It was a colossal billion-dollar fraud against New Zealanders.

It was all swept under the table because the Government at the time was in one of its cutting-red-tape campaigns and it was embarrassing to have their ideology weakness exposed.

The biggest example of the free market letting our people down, however, is sub-standard timber being permitted when building homes.

If you ever need an example of the free and unregulated market working this was it.

The market corrected itself all right. Builders were broke. People lost their homes and in several cases took their lives.

Government washed its hands of it. Council inspectors washed their hands. Taxpayers, ratepayers and home owners picked up the bill. Lawyers and bankers got rich.

Our shonky management at the top hasn't hit our reputation overseas until now.

Fonterra's emperors have been exposed to the rest of the world without clothes. Our political and business elites keep messing things up with impunity. Meanwhile the little people pay the price. Fonterra is just another example.

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