Opinion: Fonterra cannot afford a sick day

Federated Farmers Rotorua/Taupo provincial president Alan Wills gives his opinion on Fonterra. Photo / File

Love it or hate it the dairy co-operative Fonterra is one of the best tools New Zealand has to stay afloat and for our rural centres to exist.

The recent financial loss was hard news to handle, and how the company responds to this blow will be closely scrutinised.

The co-op model has successfully worked for years so any call for the company to be broken up could be premature. If another model worked as well surely it would have been adopted by now so let us not resort to kneejerk reactions but keep a positive and constructive attitude.

Fonterra has helped keep many farms afloat in the Rotorua - Taupo area so let's not lose sight of what a strong co-operative means to us.

What we need to see happen is a much better reading of the international trade scene, better management and improved governance. Pursuing new markets with new products does bring some risk but it should have never been to the extent of the Beingmate writedown.

There are enough people there on very healthy executive salaries to keep the risk factor at an absolute minimum and quite frankly to avoid that financial loss.

However, it has happened and shareholders the length of the country have spoken. Most of them I would suggest will support the new chairman and acting CEO for a period of time. That will only happen if the fortunes of their company show a steady improvement.

So, Fonterra has a job to do on itself.

The company cannot afford a cold. It is too big to fail. It carries a lot of what generates New Zealand's income and our ability as a people to exist with the standard of living most of us take for granted.

To Fonterra's leadership team I say understand where it went wrong and sort it. You are the dairy sector's equivalent of the All Blacks.

A bad game has far too many negative spinoffs for our area and wider community.

By Federated Farmers Rotorua/Taupo provincial president Alan Wills.