8 Aug 2013

Reaction ranged from 'calm traders to confused consumers'

10:12 am on 8 August 2013

A dairy industry analyst says there have been two significantly different market reactions to Fonterra's botulism debacle.

Susan Kilsby, who is an analyst for NZX Agrifax, says that on the one hand there have been calm considered traders, and on the other, confused and alarmed consumers.

She says dairy traders have responded to the contamination in a very logical manner. "At the dairy importer level, the people who are buying the milk powder and things from New Zealand, I think they have a better understanding of the scale of this issue and the fact that Fonterra has reacted in a very responsible manner."

Ms Kilsby says that was reflected in the latest global dairy trade auction result.

She says traders appreciate that the amount of contaminated product was small - and that it wasn't in Fonterra's main milk powders. She also says Fonterra alerted the industry and the public to the incident - when many companies around the world wouldn't have.

In contrast to this, Ms Kilsby says, there has been hysteria, misinformation and widespread confusion at the consumer end of the market.

She says it possibly hasn't been handled well, with confusion over exactly which Karicare products had been withdrawn. She says Chinese consumers are also very worried about what they can and can't buy.