By Megha Rajagopalan
BEIJING Aug 5 New Zealand's Fonterra
apologised on Monday for a milk powder contamination scare in
China that has raised safety concerns that threaten New
Zealand's $9 billion annual dairy trade and Fonterra's own
business in a top market.
Fonterra, the world's biggest dairy exporter, said over the
weekend that it had found bacteria in some products that could
cause botulism. It said contaminated whey protein concentrate
had been exported to China, Malaysia, Vietnam, Thailand and
Saudi Arabia and used in products including infant milk powder
and sports drinks.
At a media briefing in Beijing after hurriedly flying to
deal with the fallout in one of its largest markets, Fonterra's
chief executive, Theo Spierings, said food safety was the
company's top priority.
"We really regret the distress and anxiety which this issue
could have caused," he said. "We totally understand there is
concern by parents and other consumers around the world. Parents
have the right to know that infant nutrition and other dairy
products are harmless and safe."
The company was not facing a ban on its products in China,
only restrictions on whey protein concentrate, he said, adding
that 38 metric tons of whey protein concentrate were
contaminated, of which 18 metric tons were used in its own
factories in Australia and New Zealand to produce milk formula
for two customers.
In China, Spierings said that products from two companies,
Coca-Cola Co and Chinese food firm Wahaha, are safe
because any bacteria would be killed during processing. Protein
drinks made by Auckland-based Vitaco Health Group Ltd, another
Fonterra customer, were also unaffected for the same reason.
A third company in China, Dumex Baby Food Co Ltd, a
subsidiary of France's Danone, has told Fonterra that
12 batches could have been affected, he said. Half have been
recalled as a precautionary measure and the other half remain in
"None of the products tested by Dumex in China have reported
problems," Spierings said. "There have been no customer
Products exported to China under the Karicare brand by
another Danone subsidiary, Nutricia, do not contain the
contaminated whey protein concentrate, he said.
Fonterra is a major supplier of bulk milk powder products
used in infant formula in China but it had stayed out of the
branded space after Chinese dairy company Sanlu, in which it had
held a large stake, was found to have added melamine - often
used in plastics - to bulk up formulas in 2008.
Spierings said the latest problem originated in a pipe in an
factory in New Zealand that was seldom used, so a normal
cleaning was not sufficient to sanitise it.
Fonterra discovered in March that some whey protein
concentrate, produced and sold to customers in May 2012, was
contaminated. It immediately began testing, but as most of the
bacteria's strains are benign, the company did not find the
harmful strain until July. Customers were informed on July 31,
"The supply chain for infant nutrition powder takes a long
time with many steps," he said.
Initial tests in 2012 did not uncover the harmful bacteria,
Spierings said, but a more thorough round of testing in March
The affected plant was closed for cleaning after the
possibility of a problem was discovered, Spierings said. He said
the problem was isolated to that factory, and he was confident
all contaminated products had been found.
China has restricted New Zealand imports of whey products,
but Spierings said he expected the curbs will be lifted as soon
as the company furnishes a detailed explanation of what went
wrong to Chinese regulators early this week.
The majority of the affected products have already been
contained, he said, and the problem will be resolved within two
days after all contaminated products have been recalled.