Reference no: EM133088408

Frontier Dairy

Frontier diary is a co-operative company owned by some 120 independent dairy farmers in New Zealand. The success of the company has been built on the New Zealand's reputation of pristine environments producing superior dairy products. In the mid-2000s, it established a joint venture company with a Chinese company, Asia Milk, with a view to tapping into the growing markets in China, and South East Asia. Frontier was the controlling partner with 51% ownership in the new business Asia First Dairy (AFD). However Asia First Dairy is a separate legal entity with it's own CEO and company structure. AFD's chief scientist in the Northern Asia lab, Ms Pak Cheng, discovered that by adding melamine powder to the milk- the tested calcium levels were significantly higher- although the actual calcium did not increase. She happened to mention this in passing to the head of production Mr Hu Ling. Clearly milk that has higher calcium level sis regarded as better quality and aids in the development of healthy bones. Melamine is a chemical powder used in the manufacture of plastics and can be toxic to humans in its powdered form. Unbeknown to Pak Cheng and the CEO of Asia First David Chan or the CEO of Frontier Ann Robinson, Hu Ling instructed workers to add melamine to the milk that was then sold throughout Asia. The milk was marketed as having high levels of calcium and good for children. Some weeks later, numerous babies were reported with unidentified illnesses and several later died. Following and autopsies, the cause of death was identified as melamine poisoning which was traced to the Asia First Dairy Company.

Who is responsible for the death of the babies?

What is ADF's responsibilities to countries in Sth East Asia?

What are Frontier and Asia Milk's responsibilities as the shareholders of ADF?

What role do you think the Government of Sth East Asia have in establishing standards for companies to follow?