Fonterra's botulism scare has contributed to an overall sales slump at Woolworths' New Zealand supermarkets.
The Australian company owns 166 Countdown stores and 56 Supervalue and Fresh Choice franchises in New Zealand.
Woolworths says the botulism scare coupled with falling prices resulted in a 0.7% drop in sales in the 14 weeks to 6 October, compared with the same period last year.
Excluding formula sales, sales were flat. However, on an annual basis, overall sales rose 1.8%.
Dave Chambers, managing director of Progressive Enterprises, which runs the supermarkets, puts that down to an increase in market share and selling more items.
However, he says prices at its Countdown stores only rose 0.1% in the quarter, with many dry items falling in price.
Woolworths bought EziBuy for $350 million in the quarter.
Online sales rose 37% in that period and the company is on track to deliver a record $1.1 billion worth of sales this financial year.