Regional Economic Development Minister Shane Jones blamed both past and current management of Fonterra after the co-operative said it expected to make a record loss in 2019.
The dairy giant warned farmers it was expecting to post an annual loss of between $590 million and $675 million following a series of asset writedowns worth up to $860 million. Fonterra also said they would not pay a dividend for the 2019 financial year, which is a huge financial blow for its farmer shareholders.
Minister Jones said it was evident for several years that Fonterra was heading towards “a precarious financial position”. He blamed its poor financial performance on bad management from past executives and made a pointed attack against its former chief executive Dutch-born Theo Spierings.
"The Dutchman has destroyed more dairy farming wealth than the GFC," Jones said.
He said 'enlarged corporate egos" still existed within Fonterra's management and he had limited confidence the financial performance would significantly improve any time soon. The Minister posed the question whether the co-operative should continue existing in its current form.
"Only they can answer that question,” he said.
Minister Jones lamented that there was “something obscene” about farmers doing the hard yards and facing rising costs while Fonterra's corporates were working in a brand new building in Auckland and pulling huge salaries.