March 17, 2015-SP

3/17/2015

Farmers are rewarded based on the quality and safety of their milk

EXAMPLE

Every milk delivery is tested and farmers are paid according to composition, safety and quality…

… leading to improvement of quality and safety metrics over time

Frequency Parameter Every delivery

Penalized deliveries, %

▪ Temperature and color ▪ Fat, protein, lactose, urea ▪ Antibiotics ▪ Free fatty acids ▪ Freezing point ▪ Somatic cell count

▪ Bacterial count

2x per month

▪ Butyric acid spores ▪ Sediment

1x per month

▪ Chloroform

Testing is done by independent laboratory (Qlip) under supervision of government

2x per year

Quality standards at factory level to maintain good quality product

FrieslandCampina FSSC 22000 based Quality manual applicable to all , manufacturing sites

Fonterra Safety & Quality Policy

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