Fonterra milking New Zealand taxpayers

The Mari­time Uni­on has hit back at “socially irre­spons­ible” Fonterra pulling out of region­al ports and says the dairy giant’s profits are being sub­sid­ized by the tax­pay­er.

Mari­time Uni­on of New Zea­l­and Gen­er­al Sec­ret­ary Tre­vor Han­son says Fonterra has come out with “weak excuses” for its decision to pull out of some region­al ports in favour of trans­port­ing products by long dis­tance rail.

Mr Han­son says the future of the New Zea­l­and trans­port industry seems to be in the hands of one man, Fonterra Gen­er­al Man­ager of Sup­ply Chain Strategy Nigel Jones.

“Fonterra holds the fate of whole region­al eco­nom­ies in their hands because of their size and influ­ence, but seem to have no account­ab­il­ity to any­one but them­selves.”

He says recent com­ments by Mr Jones to rur­al sec­tor media con­firmed Fonterra had no interest in work­ing for a stable and secure region­al eco­nomy.

“Mr Jones says his goal is to put more money in farm­ers pock­ets. Yet he has admit­ted the large pub­lic invest­ment in rail has been behind the decision to dump ports. There has been no debate as to wheth­er this vis­ion is cor­rect or dan­ger­ously wrong. Region­al com­munit­ies have been ignored.”

Mr Han­son says he does not believe the rates being paid by Fonterra to rail their goods are sus­tain­able and are basic­ally being propped up by the pub­lic.

He says there is a real danger if the rail plan fails, there would be a huge increase in con­tain­er trucks on the road and region­al ports would have dis­ap­peared.

Mr Han­son says the decision by Fonterra affects all the oth­er pro­du­cers who send goods through region­al ports like Timaru and New Ply­mouth.

He says pub­lic invest­ment in rail is a good thing, but only as part of an integ­rated trans­port sys­tem, and pub­licly owned rail should not be used to play off regions and trans­port modes against each oth­er.

“It is com­mon know­ledge that ports such as Timaru and New Ply­mouth had planned and inves­ted heav­ily in upgrad­ing infra­struc­ture to cater for Fonterra. Now they are left high and dry because of overnight decisions. There has been no con­sulta­tion, no social respons­ib­il­ity and no recog­ni­tion from Fonterra about the wider implic­a­tions of their actions.”

“People in the regions are pay­ing three times to sub­sid­ize Fonterra profits – they are pay­ing for their region­al ports to invest in infra­struc­ture that is then made worth­less, they are pay­ing to upgrade rail infra­struc­ture to carry Fonterra goods, and they are pay­ing with their jobs and live­li­hoods when Fonterra makes overnight decisions to aban­don region­al ports.”

Mr Han­son says the “hands off” approach by Gov­ern­ment to ports has led to a dys­func­tion­al situ­ation which was harm­ing region­al eco­nom­ies.

“We can­not have a com­pany like this able to dic­tate terms to region­al New Zea­l­and and cause hav­oc in region­al eco­nom­ies through arbit­rary and irre­spons­ible decisions.”

He says that the profits made by Fonterra and primary indus­tries are not just cre­ated on the farm, they are cre­ated by an entire pro­duc­tion and logist­ics chain that includes trans­port work­ers, ports and ship­ping.

“The actions of Fonterra have a massive impact on region­al eco­nom­ies, and if they con­tin­ue to make harm­ful decisions based entirely on their own short term interests, then reg­u­la­tion is the only answer.”