The Agriculture Minister has made it clear where he believes the blame lies for the fortunes of Fonterra, as it faces a huge financial loss.
The dairy giant said it expected to post a loss of up to $675 million this year, thanks to write-downs on its assets.
- Disappointed: Farmers react to Fonterra's $675 million forecast loss
- Fonterra signals huge loss for 2019
Damien O'Connor told Magic Talk's Rural Exchange that it was good to see Fonterra being open about the issue.
"They are being very upfront and honest, which is really valuable," he said.
He said the announcement wasn't unexpected, and slammed past management for the situation.
"We've had a previous regime and CEO who has just been trying to pull the wool over everyone's eyes," said O'Connor.
"He's long gone, and good riddance I say."
O'Connor said he had been concerned for some time at the decisions made at the Fonterra.
"Intuitively, they seemed wrong and now they have been proven to be wrong."
He said it was essential that Fonterra moved forward, as the country's biggest and most important company.
"They have to get it right, but first they have to be upfront and honest with shareholders and the wider community.
What's important to Fonterra is important to the rest of the country."
Fonterra's write-downs include:
- $200 million on its investments in Brazil "due to the economic conditions" in the South American country
- $135 million on investments in troubled Venezuela
- $200 million on China Farms "due to the slower than expected operating performance"
- $200 million here in New Zealand, thanks to "the compounding effect of operational challenges, along with a slower than planned recovery in our market share"
- and $70 million on its businesses in Australia due to "continued drought, reduced domestic milk supply and aggressive competition in the Australian dairy industry".