An anatomy of an exploding lunch … programme

Wednesday, 12 March 2025

This story was originally published on The Post and is republished with permission.

When Associate Education Minister David Seymour took over the school lunches programme it was out with “woke sushi” and in with meatballs and pasta ‒ but quickly it was then frozen pies, scalding food, or no food at all. What happened? Anna Whyte, Kelly Dennett and Katie Ham report.

It had all started off so well.

Less than six months ago, Hamilton was celebrating the creation of 100 jobs when the local Libelle Group secured a partnership with global conglomerate Compass Group and Gilmours (Foodstuffs) to form The School Lunch Collective, which would deliver the Government’s new lunches in schools programme.

In a slick video presentation explaining the Collective’s objective, Compass Group brand ambassador Brett McGregor strode through a potato field, extolling the virtues of a “paddock to playground” format that would “support student growth and learning” through nutritious food.

The video follows hand-picked seasonal produce being carefully loaded onto tractors; while McGregor explains the “technology, expertise and attention to detail” that would ensure produce was quality controlled. Machines were calibrated to ensure every meal met “the highest standard”, before being delivered fresh, to schools, he explained.

Out of the purpose-built, industrial-scale Pukete kitchen Libelle staff would prepare meals for more than 124,000 students, sending them to satellite kitchens across the country where they would be heated and packed into insulated carriers before being delivered to schools.

Libelle Group had for 20 years offered a range of food services, including tuck shop food and residential catering, and it had previously supplied food to schools ‒ but this contract was different.

It was a significant undertaking. RNZ reported in 2023 that Libelle was making 25,000 meals a day in Pukete for school pupils. This year it was subcontracted by Compass to make five times that.

Not only that, but the Government would be paying $3 a meal ‒ shaving off about $5 from what it used to fund, and saving $130 million in the process.

Said Associate Education Minister David Seymour, who is responsible for the programme, last year: “As it happened, the crowd that had been able to give us the best deal, they do most of their food preparation in Hamilton.”

The school lunches programme was first introduced by the Labour-led government in 2019, but has been a political football for longer with parties debating the responsibility of parents to feed their children. (Last week, Prime Minister Christopher Luxon, when asked about criticism of the current food, said parents unhappy with the meals should send their children to school with a Marmite sandwich.)

Seymour had the programme, Ka Ora, Ka Ako, in his sights when he entered office, saying the lunch programme as it stood ‒ previously delivered by 158 external providers ranging from Pita Pit and Subway, to local groups like Fed and Libelle ‒ was “wasteful spending”.

Lunches were then being costed between $5.78 and $8.68 by the Ministry of Education. It is understood providers were cut loose if performance was not up to scratch.

Seymour questioned whether the then $340m programme was delivering educational results, and vowed to slash it. “There’s no question, we can’t keep spending the same amount of money. That doesn’t mean you can’t achieve the same result,” he said at the time.

In August last year, he invited food manufacturers, producers, wholesalers and distributors to tender for a “new and improved” programme.

Two months later, Seymour said he’d made $130m in savings, which would eventually be $170m when the rollout was complete, through “supply chain efficiencies” and “leveraging private sector expertise”.

The meals would cost $3 each.

Health Coalition Aotearoa was among the first to express concern when multinational food service Compass Group was named as the lead supplier, despite previously having been on a performance management plan by the Ministry of Education because of concerns about the quality of its food.

But Seymour also received kudos for expanding the programme ‒ KidsCan was appointed to deliver food for 10,000 children into Early Childhood Education ‒ through the programme’s savings.

In October, Seymour launched the new menu with a taste-testing in Parliament, telling media the beef rissole meal he’d sampled was “one of the best meals I think I’ve ever had”.

Having previously criticised a menu of “woke food like quinoa and sushi”, Seymour, alongside others, tasted rissoles, chicken katsu, chickpea curry, mince and beans, and meatball pasta. Despite the rissoles being one of his favourite meals of all time, he rated them a 9.5 and the butter chicken a 9.25.

But one Taranaki principal visiting Parliament with his class at the time told The Post then that he would never have let his pupils try the meals if he’d known Compass was the supplier, given problems his school had previously had with it. He claimed meals had arrived with mould, hair and even a band-aid.

That warning would soon kick off a litany of complaints when meals started being delivered in schools in February. Meals would arrive late, or not at all, with schools scrambling replacements.

Some food was cold, or in a case last week, so hot a pupil dropped it, scalding themselves. The School Lunch Collective’s spokesperson Paul Harvey, also Compass Group’s director, said that was “deeply regrettable”. The Ministry of Education was investigating.

Some students received frozen meat pies, with an acknowledgement from the Collective it was catching up on distribution, and one school received boxes of Wattie’s fish pie.

Professor Lisa Te Morenga, a nutrition and Māori health researcher of Health Coalition Aotearoa, was “not at all surprised” Libelle had fallen into liquidation given the cost of the meals.

She believes Seymour “decided to ignore the very strong evidence that Libelle and Compass … couldn’t be able to do this. They were previously given $8.50 per head and they couldn’t do it then, so why would they be able to do it now?”

Te Morenga said delivering a $3 meal was impossible to achieve, that the programme had been “set up to fail” and called on the previous programme to be reinstated as soon as possible.

“As a result [of cost cutting] they’ve had to compromise on the size of the meals and nutritional quality.

“I feel sorry for the people who have been employed by these companies, they've been under the pump trying to do the best they can for the kids with inadequate resources, an impossible task ahead, meanwhile other people in the community who were delivering beautiful meals and really good set-ups have lost their jobs.”

Professor Boyd Swinburn, also of the Coalition, said the programme was at a “tipping point”.

“It’s an absolute trainwreck. It’s been heading towards a crash in slow motion but this is definitely a tipping point.”

Swinburn said the previous programme worked well because it had added benefits like local job creation, and positive and existing relationships between schools and suppliers.

“The approach that the ministry took before was to pay a fair price, one that gave good quality, one that gave a reasonable profit to people, one that minimised cost to Government.

“I don’t know what the patch-up arrangements would need to be.”

Seymour, on the other hand, is optimistic and says he won’t be going to the finance minister asking for any school lunch top ups.

“I actually think the model we have is working very well. There have been challenges. We've been really open and honest about them.

“We've got a track record of working through and solving them. We'll continue to do that. And I think people are going to be very pleased with the model. Yesterday, our on-time delivery was 99.74%.

“We've been in touch with [the contractors], probably almost on a daily basis, saying, ‘Look, you guys need to improve this’. That contact, I think, has been crucial, so we're not micromanaging them, but we've been keeping in close touch about performance.”

Asked if the $3 per meal price tag was realistically still on the table, Seymour said, “well, that's what we've contracted to pay for two years, Compass have an obligation to deliver at that price point”.

“We're saving 170 million bucks a year. That's pretty impressive. And I think ultimately, we're going to have a better product, notwithstanding … work[ing] through some issues along the way.”

The programme is also struggling, politically. In what was likely a first for a prime minister’s post-Cabinet press conference, Christopher Luxon on Monday uttered the words “exploding lunch”, calling the incident where a student was scalded last week “utterly unacceptable” and “terrible”.

Political commentator Ben Thomas, who previously worked for the National Party, called the “increasingly bizarre scenarios” with school lunches “certainly an issue … that has been a struggle for the Government”.

“It started off pretty poorly for the Government. The promise was to do more with less. Then it seemed as if … the tide was turning in the sense that the critics were starting to seem a little over-fussy in terms of the sort of food that they wanted.

The criticism had moved from, “this is an inedible, unidentifiable lump of something that might be meat or beans”.

“Then you start getting children injured by the food. And that takes the Government back to square one.”

On Tuesday the liquidation of Libelle was notified, with schools receiving emails from the Ministry of Education at the same time media began reporting on its closure.

Paul Harvey, from the Collective and Compass, said its priority was continuing to serve lunches.

“Deloitte, as liquidator, has asked Compass Group New Zealand to help manage the transition and ensure stability while exploring options for Libelle’s future.

“To minimise disruption, Compass Group New Zealand has taken immediate steps to support Libelle, including ensuring staff wages are paid and keeping kitchen facilities running.”

Compass Group has assumed operations and assured the Ministry of Education that it will continue providing meals to students every day. The ministry said Compass had assured it that any disruption would be minimised and would not materially impact the deliveries.

Seymour said his “number one priority through all of this has been maintaining the volume and improving the quality. The quality will improve, the volume will be maintained, and we will see children that prescribe to get these lunches, getting these lunches”.

Asked if there were any financial penalties included in the contract, Seymour said the Government’s contract was between the Ministry of Education and Compass.

“There are potential financial penalties in that contract. They have other contracts with subcontractors, including Libelle, and it doesn’t help for me to start getting into what their contracts say.”

On the security of service, Seymour said throughout the term they had been keeping their options open, ”and we've got to a stage now where we're able to be a bit more positive”.

“I was a one time Boy Scout, and what we do is we prepare for the worst and hope for the best.”

Neither Libelle nor Compass, nor Seymour, nor the Ministry of Education would elaborate on what had gone wrong for Libelle, with Seymour citing commercial sensitivity.

However, it is likely to be a lingering problem for the Government.

“In one sense, the doors have been opened to stories,” Ben Thomas said. “Someone burning themselves on food often would not be a story at a national level. And it's very difficult to get it off the agenda until it's settled down into a level of service that doesn't attract attention in the way that it is now.”

It may be a case of the contractors improving the system, or changing the model, which would also attract media attention.

“Politically, there's no sort of easy way out of this,” he said.

The current contract spans 2025 and 2026.

“What happens after that remains to be seen,” Seymour said.

“But obviously, we're working through options.”

A menu of complaints

October 27, 2024: Compass was criticised for previously delivering mouldy food to schools.

February 5, 2025: Schools report lunches aren’t being delivered.

February: Secondary Schools Association president Vaughan Couillault said schools were spending their own money to pay people to distribute the meals, something previously handled by Ka Ora Ka Ako. (His school had 1600 meals that had to be handed out.)

February: Waverley Primary School, in Taranaki, reported pies had been delivered to the school as a lunch replacement. The School Lunch Collective said it had to temporarily depart from its standard menu on a Friday, and would be delivering Mrs Macs pies instead. It said it knew they didn’t meet nutritional guidelines, but subbing pies would enable them to get on top of food production.

February: McAuley High School in Auckland had to buy its own food after missed or late deliveries. Another principal said lunches had turned up at 2.45pm ‒ as the school was closing for the day.

February: A Canterbury school said school staff were diverting from their daily tasks to sort and distribute meals. The school would have to find money from its budget to employ someone. Waste from the lunches was not being picked up quickly.

March: A Year 12 student tells The Post the school lunches look like “cat food” and are “disgusting” and students don’t want to eat them.

March: The NZ Principals’ Federation, representing more than 2000 principals, writes to David Seymour saying the lunches have not delivered on expectations.

March: A South Auckland school was delivered 450 mac and cheese with ham in it ‒ despite the school ordering ‘halal friendly’ meals. Paul Harvey, Compass managing director, said there was a delivery error.

March: Murchison Area School received meals with plastic film melted into the food, which their principal described as “disgusting and dangerous”. Seymour said it was a major failure and was being taken seriously. The School Lunch Collective said it would lower the temperature on their ovens, from 180C to 160C.

March: A child receives treatment for second-degree burns after dropping a cottage pie lunch on themselves. An investigation was launched.

For more stories like this go to The Post.

Correction: The extension to food in early education settings provided meals for 10,000 children, not 1000. Story updated March 12, 12.36pm.