1 Nov 2011

Fonterra's shareholders seek risk analysis

9:16 pm on 1 November 2011

Fonterra's Shareholders' Council wants the dairy cooperative to assess the risks of another cut to gas supply and investigate ways of lessening the impact.

Fonterra estimates farmers had to dump more than 50 million litres of milk that could not be collected and processed when the gas supply to its plants in Waikato, Bay of Plenty and Northland was cut for up to two days last week.

Farmers will be paid for the milk they were forced to spill and Shareholders' Council chairman Simon Couper says it is too early to know how the disruption will affect the season's payout.

"The shareholders would expect the board to ask the management to evaluate the risk of something like this happening again," Mr Couper said.

"Like any risk it is not an issue until it actually becomes a problem," he said.

Gas supply to the upper North Island was disrupted after a ruptured seam was discovered in the pipeline in Taranaki last week.

The even was a reminder of the risks to the dairy industry that needed to be evaluated to steps could be taken to mitigate them, Mr Couper said.