Winston Peters blames Fonterra's 'bad decisions' for Tip Top sale

by RNZ / 14 May, 2019
Winston Peters is acting Prime Minister while Jacinda Ardern hosts a summit in Paris Photo: Ana Tovey / RNZ

Winston Peters is acting Prime Minister while Jacinda Ardern hosts a summit in Paris Photo: Ana Tovey / RNZ

RelatedArticlesModule - pols

Acting Prime Minister Winston Peters has called the sale of ice cream company Tip Top a "sad day" for New Zealand, laying the blame squarely on past management at Fonterra.

Dairy collective Fonterra, New Zealand's largest company, is selling ice cream company Tip Top for $380 million to the British-based ice cream company Froneri.

Mr Peters has criticised the sale, and told Morning Report it was against country's national interest for the company to be sold to overseas buyers. He pinned the blame specifically on past governments and Fonterra's former management.

"One of the reasons why this is happening is because of the disastrous investment in BeingMate [Baby Food] which came at hundreds of hundreds of millions of dollars of lost opportunity cost, in effect, to Fonterra.

"I'm just saying that surely we understand now, with greater clarity, the mistaken approach of the prior administrations and ... dare I say it in this case, Fonterra. I'm not blaming the present management but I am blaming the past management where people were paid massive salaries whilst the company was being imperilled." However, he said the government would not be looking at legislation to specifically stop sales like that of Tip Top.

"We can't intervene like that, but here's the rub: we are trying to add value to our products to afford the wealth and employment of New Zealanders and when these things happen we need to look at why they happen and ask ourselves 'how did we get to the situation where in 2001 Fonterra bought that operation, Tip Top, and now in 2019 because of some serious mismanagement mistakes and bad decisions we're selling it to the advantage of another economy and not ours."

"Fonterra is not a government-owned company but we are making it very clear that if you want a supportive environment around New Zealand businesses and New Zealand entities then there are certain principles that should be followed.

"I railed about it and said we need to have a dramatic change in our economic approach. We had a sort of superficial commentary from lots of people who now want to know what the answers are and the first thing we need to know was that the sale was taking place. If a government is not told about this type of thing then we're left with the aftermath and the circumstances of a fait accompli."

He argued the government's research and development tax credits would help New Zealand businesses transition from simple commodities to higher-technology and value-added products.

"The first thing we did about it was to massively increase the research and development funding from government to business in New Zealand. The second thing we're gonna do about it is ensure we focus wherever we possibly can on added value, and the third thing we will not do is just ignore the mistakes of the past and so believe that somehow these people who behaved in what I would call a mostly irresponsible way were somehow right."

However it was not clear how such an approach and awareness would prevent sales like that of Tip Top, or even investment in offshore companies like BeingMate which specialises in turning milk into baby formula, a value-added product.

Trade wars, steel tariffs and FTAs

Mr Peters was also questioned about the looming threat of trade war between the United States and China.

"It's always been concerning that for the threat of this approach when it comes to international trade because in the end there'll be a knock-on effect and it could very likely affect New Zealand adversely," he said.

"But, it's a situation that's controlled by the American voter or the American domestic market and we can't change that other than to say that we are concerned about its ramifications for us and countries like us.

He said progress was being made on reducing trade barriers with the US.

"We're working very seriously on two things, the steel and aluminium tariffs but secondly a free trade deal with the biggest economy in the world - namely, the United States.

"Vice President of the United States Mike Pence promised me to be working on it from that day forth and so we have expectations that we're taking the matter a whole lot further recently."

He said there was life in a US trade deal, and also pointed towards moves being made towards a trade deal with the EU.

"Yes there is, for the very reason that Trump laid out in his speech and was recited back to Vice President Pence and more importantly we went decades with no progress with respect to the EU and a fair trade deal and now it's a matter of serious progress as we speak.

This article was first published on Radio NZ.


Top investigator urges police to speak up about wrongful convictions
108539 2019-07-19 00:00:00Z Crime

Top investigator urges police to speak up about wr…

by Mike White

Mike White talks to investigator Tim McKinnel, who says police often turn a blind eye to possible corruption out of a misplaced sense of loyalty.

Read more
Jacinda Ardern to focus on Australia deportations in talks with Scott Morrison
108570 2019-07-19 00:00:00Z Politics

Jacinda Ardern to focus on Australia deportations…

by Craig McCulloch

PM Jacinda Ardern has doubled down on her criticism of Australia's deportation policy as "corrosive", ahead of her meeting with Scott Morrison.

Read more
How closed adoption robbed Māori children of their identity
108572 2019-07-19 00:00:00Z Social issues

How closed adoption robbed Māori children of their…

by Te Aniwa Hurihanganui

Te Aniwa Hurihanganui looks at the outdated Adoption Act and its impact on Māori who grew up desperate to reconnect.

Read more
The new robotic surgery aiding vaginal mesh removal
108377 2019-07-19 00:00:00Z Health

The new robotic surgery aiding vaginal mesh remova…

by Ruth Nichol

Women with complications caused by deeply embedded vaginal mesh are being helped by a pioneering surgical technique.

Read more
A beautiful mind: What people with Alzheimer's can teach us
108544 2019-07-19 00:00:00Z Health

A beautiful mind: What people with Alzheimer's can…

by Fergus Riley

North Auckland farmer Fergus Riley has uncovered many important lessons in caring for his father Peter, who has Alzheimer’s.

Read more
Instagram's trial to hide the number of 'likes' could save users' self-esteem
108617 2019-07-19 00:00:00Z Psychology

Instagram's trial to hide the number of 'likes' co…

by Joanne Orlando

Instagram is running a social media experiment to see what happens when it hides the number of likes on photos and other posts.

Read more
The Hawke's Bay farm producing meat of uncommon quality
108594 2019-07-19 00:00:00Z Food

The Hawke's Bay farm producing meat of uncommon qu…

by Simon Farrell-Green

Duncan Smith and Annabel Tapley-Smith weren’t satisfied with producing meat of uncommon quality. So they bought a butchery.

Read more
When biodegradable plastic is not actually biodegradable
108562 2019-07-19 00:00:00Z Planet

When biodegradable plastic is not actually biodegr…

by Isabel Thomlinson

A study on biodegradable plastic bags found they were still intact after three years spent either at sea or buried underground.

Read more