21 Nov 2013

Formula makers still reeling from botulism scare

4:22 pm on 21 November 2013

The Infant Formula Exporters Association predicts the market fall-out from the Fonterra botulism scare could drive some smaller manufacturers out of business by the end of the year.

One of the larger formula companies Nutricia is considering job cuts in New Zealand and Australia because it says international demand has been slow to recover after the contamination alert.

International food company Danone, Nutricia's parent company, is seeking more than $300 million from Fonterra in compensation.

Infant Formula Exporters Association chair Michael Barnett said smaller manufacturers were also under financial pressure.

"One of the concerns we've had all the way through is that the longer New Zealand firms were frustrated at getting their goods into China, then there was going to be the probability that some of them would not be able to sustain the costs and the slowdown of income from this market, and that their ongoing presence in China would be at risk."