5 Aug 2013

Fonterra boss apologises to Chinese customers

10:39 pm on 5 August 2013

Fonterra's chief executive Theo Spierings has apologised to Chinese customers over the dairy contamination scare which has shaken the money markets and wiped millions off the company's value on the stock market.

China is the New Zealand company's biggest customer and has suspended imports of products that contain its whey protein concentrate and a product known as base infant powder formula. Three batches of product totalling 38 tonnes have been found to be tainted with a bacteria that causes botulism.

The Chinese embassy in Wellington on Monday called for the New Zealand Government and Fonterra to be transparent and take action quickly.

Zhang Fan, the embassy's economic and commercial counsellor, said China is clearly an important market for New Zealand - but it can easily source dairy products from other countries if it needs to.

"The most important thing for the New Zealand Government and also for the enterprise that is Fonterra is to give Chinese consumers as much information as possible to alleviate their concerns and also their anxieties."

Zhang Fan said the Government must take effective measures to make sure that a similar situation never happens again.

Fonterra has said the products were contaminated with a bacteria through a dirty pipe in one of its factories in Waikato, although the New Zealand Government said on Monday there is no guarantee this was the cause.

In Beijing on Monday, Fonterra chief executive Theo Spierings apologised to Chinese customers for the distress and anxiety the issue may have caused.

Mr Spierings told reporters the whey product at the centre of the scare tested good when it was checked in New Zealand, but bacteria showed up later in overseas testing.

"When we used it in Australia in March with higher testing regimes, we found sulphide blight through that pipe and we are sure that that is completely gone. So yes, it has been addressed and no, it will not happen again. We have learned from it."

New Zealand's Trade Minister Tim Groser said China's ban did not apply to all Fonterra products and its whole and skim milk powders are still going through.

State media in China says four Chinese companies are recalling New Zealand products that may be tainted. Consumers are willing to pay a premium for foreign brands of baby formula.