Prosser Richard: Urgent Debates — Dairy Products Whey Protein—Response to Contamination IncidentText is incorporated into the Bound VolumeProsser Richard: Urgent Debates — Dairy Products Whey Protein—Response to Contamination Incident[Sitting date: 06 August 2013. Volume:692;Page:12334. Text is incorporated into the Bound Volume.]RICHARD PROSSER (NZ First):I rise on behalf of New Zealand First to make a contribution in this very serious urgent debate which doubtless affects us all. There can be no dispute that the Fonterra food contamination scare is a very very serious matter for New Zealand. As a parent there is nothing you care more about in the world than your child’s welfare. Every parent in this House would agree with me on that I am certain. Our immediate concern therefore has to be with the families and their children who may have been affected by this issue and we must act in a cooperative manner as a Parliament to address that. We stand with the Government and with the Opposition—the Labour Opposition—in this regard. This is a time for questions certainly but not yet a time for recriminations. Questions will follow and from them we certainly hope there will be answers so that situations like this are not repeated. How many children have been affected? One has to assume that there is a huge number potentially affected here and abroad. The news thatNutriciaKaricare Stage 1 New Baby Infant Formula which is for babies from birth andNutriciaKaricare Gold+ Stage 2 Follow-on Formula which is for babies from 6 months have been affected or may have potentially been affected by this contaminated powder is truly shocking.It is important to remember that when children are involved in an issue such as this the world takes notice. This story has been covered in news agencies not just in the countries affected but further afield in the United States and in the United Kingdom. It has been covered across the Asian continent fromThe Times of India to theBangkok Post  theTaipei Times  all the way to Saudi Arabia and the Middle East. The BBC CNN the Wall Street Journal  theNew York Times  theFinancial Times  and Australia’s the Age and the Sydney Morning Herald have all covered the story. All of these markets and all of these parents are seeing the news that New Zealand products are potentially dangerous for children.Our whole economy hinges on our capacity to supply our export markets with pure food. That has been one of our great comparative advantages in a world that seeks healthy food. I can speak from personal experience from 10 years in the wine industry of the degree of attention that has to be paid to cleanliness and the degree to which people have to be absolutely fastidious at all stages in the food production chain. As a winemaker it was my responsibility to make sure that there was no contamination at all entering the wine. In fact contamination at any stage could have resulted in the product being destroyed. Even if the product was not destroyed there were residues. I remember one occasion particularly where a competitor winery had an instance where they had not observed a withholding period for an application of fungicide in a vineyard and a residue of a banned fungicide was detected in a consignment of wine that was exported to the European Union. The Europeans of course have extremely stringent controls and safety standards for chemicals of that type. The end result was that an entire shipmentwas written off. That resulted in extreme financial hardship for that particular winery which resulted in it going broke.So in one way this food contamination scare is a wake-up call for all of us. Any illusions of complacency that we might have had have been dispelled. It reminds us of how vulnerable our economy is. So it will be vital to get to the heart of this matter—when why and how it happened. New Zealand First is of the view that serious questions will need to be asked of the whole role that Fonterra plays in our economy. We do have a lot of eggs in one basket. We place a lot of faith in Fonterra as a large player on the global scene but I think we lull ourselves into a sense of misunderstanding about Fonterra and its size in the world dairy market. In New Zealand we allow ourselves to believe that we are a major and significant player in dairy in global terms because of the size of our exports relative to production. We know for example that New Zealand—mostly through Fonterra—supplies something like 35 percent of the world’s cross-border trade in dairy products and for that reason we believe ourselves to be massively significant.The reality is however that New Zealand produces less than 3 percent of the world’s milk. Most of the world’s dairy production is consumed in the country of origin. Where New Zealand has an advantage is that we have an enormous capacity for production over and above what our own requirements for consumption are. So that puts us in a position where we are able to export 95 percent of what we produce. That is a good thing because it gives us a strong underpinning to our economy but it also puts us in a position where if a scare like this happens we are reliant on the preservation of our brand’s business—ofFonterra’s brand’s business particularly—because there is not the sheer volume or bulk of other commodities to back it up. Countries that seek these products can get them from other places.So maybe we have too many eggs in the one basket. With size comes economies of scale and efficiency is one of those things but there is a down side and that is increased vulnerability. The balance needs to be the right one. We must rethink our approach to risk given the role of the dairy sector. Fonterra is a global company but along with the gains that come from globalisation there is immense responsibility. New Zealand First will not rush to judgment on this crisis but we would ultimately like to see some good come of it. That means that the following need to be addressed: firstly that this type of situation is not repeated; secondly that our systems emerge stronger and more robust; and thirdly that New Zealand does get credit for dealing directly and openly with this crisis.I think it is pertinent to point out at this point that at the moment we have a scare—a scare relating to a potential contamination of a very small quantity of one product line from one company. In the fullness of time it will probably turn out that in actual fact nobody has been hurt by it. But one thing that has been hurt is New Zealand’s reputation and the reputation of our premium brands has been hurt. We will work hard and we will get that reputation back but it is also worthy of note that in some markets the efforts that we undertake in order to ensure that we do regain our premium place in those markets mean that those markets will offer us a correspondingly lower price because they realise that there is that element of risk and they realise that there is that great element of importance to us.I think it is probably a good time for us to consider that we have this enormous potential for effect on our entire economy—on brand New Zealand on “New Zealand Inc.”—as a result of one scare from one small potential contamination from one product from one line. I ask the House whether we have given consideration to what the effects on our economy would be if a disaster were to occur on a much greater scale and if we were faced with a genuine problem around an issue such as foot-and-mouth disease. Ithink this scare over possible contamination should serve as a canary in the mine shaft to New Zealand. It should serve as a warning as to how vulnerable we are as to how vulnerable our export-based economy is and as to how vulnerable all of us are here in New Zealand if our primary sector is threatened. I think it is a good time for New Zealand to look at our biosecurity systems. This wake-up call of an organism potentially leaving New Zealand gives us cause to wonder what would happen if an unwanted organism was to enter New Zealand. New Zealand First is on record as saying that we believe that this Government’s approach to biosecurity means that foot-and-mouth is a matter of when and not if and when that day comes that will be truly disastrous for us all.I reiterate that New Zealand First does not rush to judgment on this crisis. We do stand with the Government and with the Opposition in standing with Fonterra and ensuring that we do have a resolution to this issue as soon as possible. But I think that at the same time it is necessary for us all to give serious consideration to how severe an outbreak could be. Thank you.