26 Jan 2009

Fonterra again defends itself over tainted milk scandal

7:25 am on 26 January 2009

Fonterra has reiterated that it had no knowledge of the criminal actions of four managers of its Chinese joint venture, Sanlu, who have been jailed for selling melamine-contaminated milk.

The former chairwoman of Sanlu Group, the bankrupt dairy company at the centre of the scandal and part-owned by New Zealand cooperative Fonterra, was sentenced to life in prison for producing and selling fake or sub-standard products.

Three other senior managers have received prison terms ranging from five to 15 years.

Fonterra chief executive Andrew Ferrier says the actions of the four were never reported to the Sanlu Board, which included Fonterra representatives, but the New Zealand co-op pushed for a public recall of the contaminated milk powder once it became aware of it in early August last year.

Mr Ferrier says Fonterra supports the New Zealand Government's position in not condoning the death penalty handed to two other people for their part in the melamine scandal.

Fonterra should keep links with China

Federated Farmers says it is important that Fonterra does not retreat from China in the wake of the toxic milk scandal.

At least six babies in China died, and 300,000 became ill after drinking milk formula mixed with the industrial chemical melamine, used to cheat protein tests.

On Thursday, two men were sentenced to death at a court in northern China for supplying melamine that was mixed with milk.

Verdicts for 21 people involved in the scandal were handed down, including Sanlu bosses and city officials accused of failing to report the growing numbers of sick children, state news agency Xinhua reported.

The Green Party on Friday questioned why New Zealand businesses are so heavily involved with an oppressive regime such as China, saying it is lucky no New Zealand officials were tried.

However, Federated Farmers dairy chairman Lachlan McKenzie says Fonterra is not to blame.

Mr McKenzie says Fonterra may have been naive before going into business in China, but it is important the company stays there and learns from the scandal.

The Dairy Workers Union says it hopes Fonterra can move quickly to repair the damage to its international reputation.