The chief executive of Air New Zealand says his company took a hit to its reputation almost immediately after the news of Fonterra's botulism scandal broke.
Fonterra ordered a precautionary recall of some whey protein concentrate in August after test results indicated some batches may have been contaminated with botulism-causing bacteria.
The recall was later lifted after further tests gave the all-clear.
Speaking at a conference on doing business in China, Air New Zealand chief executive Christopher Luxon said the airline experienced massive changes to its cargos to China, particularly of dairy products, and it also had an impact on potential Chinese tourists.
He says the changes were felt within hours or days.
Mr Luxon says research carried out with Tourism New Zealand in the first few days after the news broke indicated 53% of potential visitors from China who were actively considering a visit to New Zealand were aware of the Fonterra issue.
Of that group, 41% were feeling more negative about their view of New Zealand, he says.
Mr Luxon says the outcome meant no loss of momentum for Air New Zealand, but the incident is certainly a wake-up call for all New Zealand companies doing business in China.
Air NZ makes some changes post botulism scare
Air New Zealand has made a number of changes to how it does business in China as a result of the Fonterra botulism scare, even though the airline suffered no lasting spill-over damage to its reputation.
Mr Luxon says among the changes the airline has made is changing its public relations agency and appointing local management.
He says Air New Zealand launched in China eight years ago and was the first airline to run services between mainland China and New Zealand - that was Shanghai to Auckland back in 2006.
Mr Luxon says Air New Zealand has established a Shanghai crew base of about 130 people in China.
But he says the airline also has local Chinese, who are bi-lingual flight attendants, who receive training in New Zealand and operate only on the Shanghai to Auckland route.
Mr Luxon says 91% of Chinese visitors coming to New Zealand are visiting for the first time, so the bi-lingual staff are an attempt to make them feel welcome and to bridge the two countries both culturally and linguistically.
He says in the past Air New Zealand has sent a series of general managers from New Zealand to China to build the business, but without sufficient resources and there has not been enough growth as a consequence of that.
"So now what we've done is made some quite significant changes to have our business lead by a local with deep 15 years experience in the marketplace, who knows the industry, knows the trade partners, knows the government and understands the customer and consumer insights incredibly well - and that makes a power of difference."
Mr Luxon says the airline then has the ability to attract a great local team and to build a local development team.
