Fonterra in the San Lu milk scandal - a case study of a New Zealand company in a product-harm crisis

Abstract

The 2008 Sanlu milk scandal shocked the whole China and world. It was a truly tragic crisis and should never happen again. Fonterra, as a company held a 43% share of Sanlu Group, was involved in this scandal. This case study was conducted to better understand the Sanlu Group and Fonterra’s involvement in this scandal. Although this is not the first study of analysing the Sanlu milk scandal, it is a significant step towards exploring this case from a different perspective (news coverage). To accomplish this, a content analysis of 245 articles ranged from September 11, 2008 (the first time of the Sanlu milk scandal was revealed to the public by the media) to July 30, 2011 (the end of the data collection period), on different Chinese and global newspapers’ websites was conducted. In particular, this study is aimed to explore the crisis management strategies by comparing different actions taken by Sanlu and Fonterra. In addition, the author sought to have better knowledge of how the media portrayed Fonterra’s involvement in this scandal as well as the lessons learnt by Fonterra and the Chinese dairy industry.