Fonterra says China-bound milk powder halted in May for high nitrite

WELLINGTON/BEIJING Thu Aug 22, 2013 1:53am EDT

WELLINGTON/BEIJING Aug 22 (Reuters) - New Zealand's Fonterra, the world's biggest dairy exporter caught up in a contamination scandal earlier this month, said on Thursday it was forced to withdraw 42 tonnes of milk powder bound for China because of high nitrite levels.

The high nitrite was first brought up by the official China Daily in late July, raising new questions about the safety of Fonterra's products and its manufacturing and testing standards.

Fonterra had to apologise this month for a milk powder contamination scare in China after finding bacteria that could cause food poisoning in some products.

Contaminated whey protein concentrate had been sold to China, Malaysia, Vietnam, Thailand and Saudi Arabia and used in products including infant milk powder and sports drinks, it said.

The company said on Thursday a shipment of powder had been halted at the Chinese border in May after tests showed nitrite levels higher than allowed in China, although it had been approved for export after testing in New Zealand.

Excessively high nitrite levels can potentially be toxic.

"(The level was) within specifications for us but when the product got to China, it tested high," a company spokesman told Reuters, adding that Fonterra had been in full control of the affected product and that none of it had reached the retail supply chain.

Wellington has voiced frustrations over Fonterra's foot dragging in disclosing the contamination issue, and during a visit to China on Thursday, New Zealand Minister of Foreign Affairs Murray McCully sought to distance the country from Fonterra's woes.

"Fonterra has some work ahead of it in rebuilding Chinese consumer confidence," McCully told reporters at a media conference in Beijing following meetings with State Councillor Yang Jiechi and Foreign Minister Wang Yi.

"We expect from our exporters that there should not be any mistakes ... When Fonterra disappoints customers, they also disappoint New Zealand."

Dairy products account for about a quarter of New Zealand's export earnings, and China is its biggest buyer of milk powder.

Earlier this week, Fonterra's much smaller competitor, Westland Milk Products, had export certificates revoked for a small quantity of the protein lactoferrin because of unacceptable levels of nitrates were discovered in four consignments.