8 Oct 2013

Hopes high-level talks will repair market

7:18 am on 8 October 2013

Infant formula exporters hope talks between the leaders of New Zealand and China will help repair the shattered Chinese market.

New Zealand companies have reported a collapse of business in China since Fonterra told markets its product was contaminated with a potentially lethal bacteria.

Prime Minister John Key talked to the Chinese President Xi Jinping about the companies at the weekend in Bali, where both were attending the Asia Pacific Economic Co-operation summit.

Mr Key said he raised the plight of the industry, which had seen its market all but disappear in China, and the Chinese president expressed confidence those issues could be worked through.

"I did put in a plug for the small dairy companies who are having their infant baby formula products held up at the ports at the moment as sort of collateral bystanders of this issue," he said.

"He could understand the plight of those companies and the issues involved and he was confident we'd be able to work our way through those."

Infant Formula Exporters Association chairman Michael Barnett said the news of the top-level discussion was positive and hoped it would get trade moving.

"I think it's extremely positive, especially for the small-medium exporters of infant formula, that the prime minister has raised it as an issue and that he's raised it with the leadership of China," Mr Barnett said.

Mr Key plans to go to China next year to follow up the issue, once the various government and Fonterra inquiries into the food safety debacle were finished.