New Zealand Dairy Giant Apologizes for China Scare

By Hutchison, Jonathan | International Herald Tribune, August 6, 2013 | Go to article overview

New Zealand Dairy Giant Apologizes for China Scare


Hutchison, Jonathan, International Herald Tribune


Executives at Fonterra said the source of the problem had been fixed, as the company's chief executive flew to Beijing and held a news conference there to apologize.

The New Zealand dairy producer Fonterra apologized Monday for distress caused by the contamination of batches of a milk formula ingredient with a potentially toxic strain of bacteria.

The company's chief executive, Theo Spierings, flew to Beijing, where he held a news conference to address the matter.

"We deeply apologize to the people who have been affected by the issue," Mr. Spierings said at the conference, which was broadcast by Reuters.

He said that food safety, not only in China "but also around the world, is our first and foremost interest."

In New Zealand, the dairy industry accounts for about 11.5 billion New Zealand dollars, or about $9 billion, in export earnings, according to a research note by the bank ASB. That amounts to about a quarter of the country's total merchandise exports, and investors, worried about a major customer, China, sent the value of the New Zealand dollar lower Monday against the U.S. dollar.

The crisis arose after three batches of whey protein concentrate, totaling 38 tons, tested positive for Clostridium botulinum, Fonterra said. The bacterium can cause botulism, a sometimes fatal illness.

Fonterra, one of the world's largest dairy exporters, said eight customers had been affected, in Australia, China, Malaysia, New Zealand, Saudi Arabia, Thailand and Vietnam.

The RIA Novosti news agency in Russia reported that Russia had banned imports of all Fonterra products, even though it was not on the list of affected countries.

Fonterra said Monday that the contamination had been traced to a pipe that had not been properly cleaned in one of its New Zealand processing plants. Executives said that the source of the problem had been fixed.

China and Vietnam stopped some dairy imports from New Zealand in response to the contamination scare, but the company said that those were not blanket bans. Fonterra said China had banned products made in Australia using Fonterra's whey protein, which had been produced in New Zealand, but had not banned any Australian whey protein.

The Ministry for Primary Industries in New Zealand "has confirmed that China has not closed the market to New Zealand dairy products and that China is being quite specific about the range of Fonterra products which it has temporarily suspended," Fonterra's New Zealand milk products managing director, Gary Romano, said Monday in a statement to the stock market. "Whole milk powder and skim milk powder have not been suspended."

The affected batches of whey protein were produced in May 2012, but the company said that the first signs of contamination had not been spotted until March, when the product was tested in Australia. The specific strain was not identified until last Wednesday. Fonterra executives have been questioned in New Zealand and China about why it took so long to identify the problem and alert consumers. …

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