Fonterra's chief executive says the company's staff in Sri Lanka have been told to stay away from work to remain safe amidst rising consumer tension around its products there.
All 755 staff in the country have been advised to stay home following a protest outside a Fonterra factory in Colombo on Thursday.
Fonterra chief executive Theo Spierings told Checkpoint there had also been threats from concerned consumers towards Fonterra staff and facilities in Sri Lanka.
He says some sales people are being questioned about food safety while delivering goods to some of Sri Lanka's 18,000 outlets selling Fonterra products.
Mr Spierings says an unstable environment such as the one in Sri Lanka has the potential to be explosive, and the co-operative had therefore suspended consumer operations and closed its plants and office there.
A union in Sri Lanka succeeded in having a ban introduced after raising concerns about the company selling milk powder the union claimed was tainted with the agricultural chemical DCD.
Fonterra says its Sri Lanka operation is now subject to a court order that has shut down its ability to sell or advertise its products or make public statements in any way to customers in Sri Lanka.
The Government says it respects Fonterra's decision to suspend its operations in Sri Lanka because of safety fears.