Roadley says 'Powdergate' diverted the energies of dairy giant

11.00am - by KENT ATKINSON

The nation's biggest company, Fonterra Co-operative Group, was distracted when the "Powdergate" scandal blew up, according to its retiring chairman, Ashburton farmer John Roadley.

"It would not be an accurate review of our first year if I did not state what a debilitating effect the 'Powdergate' matter had on those critical first months of the new company," he told Fonterra's first annual meeting at Hamilton today.

Mr Roadley said in notes prepared for the meeting that he had no intention of unearthing "skeletons that most of you -- and I -- want left buried".

"It is not possible to even try to quantify the costs, but I know for sure if the energy that was consumed in reaching a conclusion -- and we did -- could have been applied to other productive areas of the business our report card would look different today," he told farmers at the meeting, which was relayed to six other venues around new Zealand.

Fonterra Co-operative Group last December attempted to draw down the curtain on its embarrassing $50 million scandal with an in-house report concluding illicit exports of milk concentrates to circumvent Dairy Board constraints -- and the law -- were simply the actions of over-zealous employees.

Most of the allegations related to apparent systematic abuse of export and labelling laws by the smaller of the then two biggest dairy companies, Kiwi Co-operative Dairies. At the time the company was headed by the present Fonterra chief executive, Craig Norgate, but Mr Roadley and the former Kiwi chairman, Greg Gent, have both given assurances that Mr Norgate was not aware of the illicit exports.

Mr Roadley said at the time that "no evidence of improper personal gain was found" and blamed the illicit exports of milkpowder, outside the Dairy Board structure, on the actions of a few individuals -- "lower level personnel".

The scandal was dubbed Powdergate after investigations were launched into deals involving more than 9000 tonnes of milk product from Kiwi Co-operative Dairies allegedly exported illegally.

But one year ago, Ministry of Agriculture and Forestry officials began investigating breaches of export rules under the now defunct Dairy Board Act.

The investigation has since been transferred to the new Food Safety Authority within MAF, but officials are still also investigating labelling requirements under the Dairy Industry Act after allegations some dairy companies circumvented restrictions on dairy exports.

- NZPA

Feature: Powdergate