Written By: - Date published: 9:35 am, September 13th, 2018 - 67 comments
Categories: business, capitalism, China, Economy, Europe, exports, farming, farming, Free Trade, Globalisation - Tags: fonterra
Fonterra has just reported an after tax loss of $196 million for the 2018 year. It’s never had an annual loss in its history. The new Chief blames optimistic forecasting, high butter prices impacting sales and margins, and increase in the forecast farmgate milk price, and high operating expenses in parts of the business.
They had a $745 million profit last year. So they’ve written down $405 million from Beingmate in China, and paid Danone $183 million from the botulism scare.
It means that farmers lose on average $8,000 in income.
Fonterra is the largest business we have, our largest exporter, our largest driver of R&D, largest private employer, largest driver of environmental effects on New Zealand, and it is completely invented by legislation.
This year, Fletcher Building, our second largest majority locally-owned business with any international competitive impact, made catastrophic losses on projects and is rapidly shrinking to about half its size. The government simply didn’t care.
Those are our two largest businesses by far.
It’s well time this government took Fonterra to task about its direction, its existence, and its responsibility to New Zealand.
It would be great to see Minister O’Connor and Minister Jones get together and have an actual economic development plan for the country. What we have instead is a haphazard free giveaway of $1 billion per year to business and local government projects, and a bit of promised mild tinkering with Fonterra’s legislation.
We are vulnerable to just a handful of companies in New Zealand, for both our competitive export growth and for our jobs.
We need a government with a plan to address Fonterra.