1、Giant Tripped over by BacteriaWhat is needed to bring a behemoth multinational company down to its knees？ The bacteria. Fonterra， a well-known dairy company in New Zealand， is the largest diary exporter in the world. However， such a giant was trapped in a great trouble from August 3， when it confess
2、ed that some of its concentrated whey protein powder might be contaminated by the botulinus according to its investigation in March 2013. A factory located in the central part of the northern island of New Zealand is to be blamed for the contamination. Three batches of concentrated whey protein powd
3、er produced by this factory in May 2012 have got positive results in the test of bacteria. Fonterras self-confession got some understanding and forgiveness from outsiders， but the five-month delay between finding the problem and reporting it has caused a lot of criticism and anger as well. Fonterras
4、 CEO Theo Spierings explained that it needed to take a while for the New Zealand government to find what bacteria has contaminated these whey powders. But consumers， especially Chinese consumers， who had not yet recovered from the melamine-contaminated milk powder in 2008， were shocked and heartbrok
5、en by the news that even “foreign brands of milk powder are not trustworthy”. On August 5， one day after Fonterras self-confession of contaminated milk powder， the Chinese government issued a temporary ban of diary products from New Zealand， culminating this botulinus-caused crisis. The Chain Reacti
6、on The crisis did not stop at Fonterra or New Zealand. As time went by， the list of enterprises involved in this crisis kept growing longer， because many of them used the milk powder from Fonterra to make their own products. On the first day of the confession of contaminated milk powder， the possibl
7、e partners involved in this scandal were also revealed. Dumex， Coco Cola and Wahaha were the first three enterprises that were said to have used contaminated milk powder from Fonterra. Dumex immediately admitted that it had used the contaminated milk powder and has decided to recall some possibly co
8、ntaminated products from the market. Coca Cola also ensured the customers by announcing that only a small part of Fonterras milk powder was used to produce its Minute Maid Milk， and the process involved the hightemperature sterilization which could kill all bacteria. Wahaha also released the report
9、containing the product names and batch number that might be contaminated by Fonterras milk powder. Days have passed after the first confession and more and more enterprises found that their names are connected with Fonterra. Karicare， the bestselling milk powder in New Zealand and a very popular bra
10、nd in China， cannot escape the suspect. The Ministry for Primary Industries of New Zealand has already ordered recalling two batches of Karicares products and informed China， Australia， Thailand， India and other countries of the possible contamination. The other company is Abbott. Its involvement ra
11、ised more concerns from the consumers， especially the Chinese， because it is Abbotts branch in Shanghai getting involved in this crisis and Abbott infant milk powder is very popular among Chinese young mothers. Whats worse is that Fonterras CEO Theo Spierings once mentioned that a company requested
12、Fonterra to veil its name when talking about the botulinus incident. “There is a company wanting us not to speak out its name. But we are keeping the contact with them. Presently all products have been found and relevant measures have been taken， through which efficient control has been achieved， ”
13、said Spierings. The Embassy of New Zealand in China referred this company to Abbott， but Abbott said that it neither used the contaminated milk powder from Fonterra and nor asked Fonterra to keep its name undercover. Abbott also promised to recall the products that might be contaminated. Fonterras t
14、rouble for itself is more than that. Soon after the botulinus scandal， Sri Lanka said that it had detected melamine in the milk powder from Fonterra. The New Zealand soon came out and denied the accusation. However， the sacred consumers in the world did not seem to buy it. Sri Lanka， Russia， Kazakhs
15、tan， Brunei and so on had joined in the rank of China to ban or limit the importation of milk powder from Fonterra or even New Zealand. The Insincere Apologies？ Such a chain reaction has doubtlessly greatly damaged the profile of Fonterra and the entire dairy industry of New Zealand. In order to sav
16、e the already broken image， both Fonterra and the government of New Zealand all came out to show their apologies. Fonterra， the main defendant in this incident， reacted very quickly. Three days after the revelation of the contaminated milk powder， its CEO Theo Spierings flew to Beijing and held a pr
17、ess conference， in which he “sincerely apologized to Chinese consumers for letting the contaminated milk powder into China”. He said that the consumers of food for infants and young children have the right to worry about consumer safe and healthy food. He also said that Fonterra was working the Chin
18、ese government and communicating with Chinese clients to inform people of the progress of solving the problem. After Spierings， New Zealands Prime Minister John Key also said that he would take the opportunity of visiting China late this year to apologize to Chinese consumers personally for Fonterra
19、s contaminated milk powder. Then， Bruce Wills， President of New Zealand Farmers Cooperative Association， came out to apologize to Chinese consumers on behalf of the dairy farms that supply raw milk to Fonterra. Someone even paid for this mistake with a higher price. Gary Romano， Director of Fonterra
20、s Dairy Department， resigned from his post. Though Fonterra did not explain why he left， it is widely believed that his resignation is caused by none other than the incident. Even though he might be a goat for the entire incident， but someone had to stand up and pay for the mistake painfully. Romano
21、， the direct manager of milk powder， was unfortunately the best choice. His resignation also showed Fonterras attitude towards this incident. However， even though some many famed figures have come out and apologized， Chinese consumers were not so easy to be appeased. Many people think that Fonterras
22、 apologies were not sincere. Prof. Gu Mingxiao from Fudan University said that the apologies of Fonterra were mostly based on diplomatic phrases. It seems to be sincere， but far from being meaningful. “The diplomacy in the crisis is just a method instead of an objective. Fonterra was far from showin
23、g any sincerity and accomplishment that match its size. It made the mistakes that many multinationals have made in China. Such a way of dealing with crisis is inapplicable， ”Prof. Gu said. Whats making Chinese disappointed and think that Fonterra was not sincere in its apologies is that it neither s
24、poke of repayment nor gave the relevant schedule in about half a month after the incident. Previously， Kelvin Wickham， President of Fonterra Greater China and India， said that the “source of contamination” had been found and the repayment would be initiated soon. But Fonterra China denied this sayin
25、g. In experts opinions， it is hard to define payment standards and relevant work. “First， there are no standards in the world about the botulinus， ” says Song Liang， senior dairy analyst from Distribution Productivity Promotion Center of China Commerce. Wang Dingmian， an expert in the dairy industry
26、， says that Fonterras repayment standards for its clients can be determined by the contracts signed between the two parties. But it is hard for ordinary consumers to ask for repayment from Fonterra， because “some consumers might lose the vouches or receipts of milk powder they bought， the only refer
27、ence to their loss”. The Self-exposure Apart from being thought to be insincere in the apology and unable to give out repayment plans timely， Fonterras method of dealing with this crisis is generally thought to be OK. First of all， it was Fonterra itself to reveal the problems to the public. When it
28、 reported this incident to the New Zealand government， it also informed the eight clients that might be involved in this incident and provided its support for their emergent investigation. “Fonterra considered this incident to be its own responsibility from the very beginning and did not try to hide
29、 the problem， ” said Chen Lianfang， a dairy analyst from China Agriculture Consultant. “The senior executives tackled this problem with the attitude of being responsible for clients and consumers. The New Zealand government also took actions actively. Their methods are worth learning for Chinese ent
30、erprises and administrative departments.” It is also worthwhile to mention that the traceability system of New Zealands dairy industry enabled the company to find where the contaminated milk powder came from and where it went. So they could report the problems to everyone as quickly as possible. Eve
31、n though the incident has involved many people and companies， no panic was seen in the consumers of New Zealand. Meanwhile， in one year and a half after the contaminated milk powder was sold， no clients of Fonterra have ever found the botulinus ? or at least have reported it ? until Fonterra reveale
32、d its own scars. Actually， it was not the first time that Fonterra revealed its scars by itself. Early in 2008， when the melamine incident happened， Fonterras name was seen. The chief criminal of this worldshaking incident， Sanlu， was a close partner with Fonterra in China. Fonterra even spent RMB 8
33、64 million becoming the second largest shareholder of this Chinese company in 2005. In September 2008， Fonterra reported the information about Sanlus mixture of melamine with the milk powder to the government of New Zealand regardless of the objections of Sanlu and local government. Then the New Zea
34、land government warned the Chinese government about this， which finally brought this scary incident out of the water. Fonterra suffered from great losses after the bankruptcy of Sanlu and several of its milk powder brands were forced out of China because they were run by Sanlu. At the beginning of t
35、his year， Fonterra reported about the dicyandiamide found in its products. The tiny proportion of dicyandiamide is caused by the dicyandiamide which is placed in the soil to reduce the impact of cowsexcrement. No countries have put the dicyandiamide into the range of their tests， but Fonterra still
36、reported that and the New Zealand forbad the dairy companies in New Zealand to do this again. In Chen Lianfangs opinion， “The most important reason for Fonterra to become the largest exporter of milk powder is that it has constant requirements for the quality of its products.”She believes that the s
37、hockwave of the botulinus incident will be appeased soon and will not have big influence over the foreign brands of milk powder in China. The Spring for Domestic Brands？ Even though Chen Lianfang believes that Fonterra will soon get out of the crisis， at least in August， Chinese consumers were scare
38、d and the trust in Fonterra seemed to be down. Chinese media kept saying that it is a good opportunity for domestic dairy enterprises to regain the market， which has been lost after the melamine scandal in 2008. Is that true？ “The problems of Chinas domestic dairy companies have been a long and incr
39、emental thing. Many enterprises did what are unforgivable and unforgettable. It is not easy to erase consumersdistrust for these domestic brands， ” said Wang Dingmian. Then， what do Chinese consumers think about the contaminated milk powder of Fonterra？ “They are really scared and refused to buy Fon
40、terras products， ” said a dealer in a supermarket. “Now they turned to the milk powder made in Europe. Those brands from Germany， UK， Holland and Ireland become extremely popular then.” The online shops that help Chinese mothers buy branded milk powder from European Union became extremely busy as of August. “The shelves with milk powder in some supermarkets in Germany
