5 Aug 2013

Contamination scare worries farmers, formula exporters

3:08 pm on 5 August 2013

Dairy farmers are keeping an anxious watch on developments in the second contamination scare to hit Fonterra and the wider industry this year.

China has suspended the importation of all Fonterra products that include whey or milk powder, while Russia has imposed a ban on all New Zealand dairy products after the co-operative announced on Saturday that three batches of a whey protein concentrate used as an ingredient in some products may be contaminated with a strain of clostridium.

It's a bacterium that can cause botulism.

The contamination occurred at a Fonterra processing plant in May last year but was only picked up in testing in March and not confirmed until last week.

In January, Fonterra and other dairy companies had to deal with the fallout from the discovery of DCD, a chemical residue, in some milk products.

Shareholders Council chairman Ian Brown said the company has taken the right steps so far in alerting customers and the wider public about the possible contamination.

But mr Brown said farmers are concerned about the food safety and market implications.

He's been taking calls from farmers concerned about the potential implications on Fonterra's financial performance in the coming year and also how Fonterra might be perceived in terms of its reaction to the issue.

Mr Brown said it's sobering news for farmers coming hard on the heels of the lift in the forecast milk payout, which Fonterra announced last week.

Infant formula exporters dismayed at contamination scare

The whey protein product at the centre of the contamination alert is not widely used in infant formula products, but is sometimes used as a replacement ingredient.

The Infant Formula Exporters Association representing 20 exporters, says none of its members use the protein concentrate in their products.

But chief administrative officer Chris Claridge says they are dismayed because they are caught up in the bans imposed by some markets and the potential damage to New Zealand's reputation.

He acknowledges that the feeding of infants is a highly sensitive issue which rightly attracts attention.

"But in this case unfortunately the entire industry is being implicated in this when it patently isn't, our members brand reputation is linked very strongly to the New Zealand brand reputation."

Mr Claridge said anything which impacts on New Zealand's reputation world-wide as a producer of safe food products is damaging.

He said the delay in identifying the contamination issue and the brands and products affected is also a concern.

Dairy products such as fresh milk, yoghurt, cheese, spreads and long life milk products are not affected.

But the manufacturer of one infant formula brand, Karicare, has recalled two of its products from the New Zealand market.

And Fonterra's animal feed subsidiary, NZAgbiz, which is one of the eight customers that received the affected whey protein concentrate, has announced a product recall of a small amount of calf milk replacer sold in the North Island.