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More trouble for dairy exporter Fonterra

Friday, August 23, 2013 - 02:09

Aug 23 - The world's biggest dairy exporter Fonterra has suspended its operations in Sri Lanka, after hundreds protested and accused the company of continuing to sell products, despite a court ban. The New Zealand company is being urged to rebuild consumer confidence, after a contamination scandal forced product withdrawals and an apology in China. Joanna Partridge reports.

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Sri Lankan protesters made their feelings clear about dairy giant Fonterra's products. They accuse the New Zealand firm of continuing to sell and advertise their milk products, despite a ban by a Sri Lankan court. The country's food safety authorities said they'd found high levels of an agricultural chemical in two batches of milk powder it tested, says the spokesman for the National Freedom Front. SOUNDBITE: SPOKESMAN FOR THE NATIONAL FREEDOM FRONT MOHAMED MUZZAMIL SAYING (Sinhala): "They are not taking our judiciary seriously. Fonterra isn't taking any notice of the independence of the judiciary. They don't accept the judiciary's decisions, they are violating their judgements and continuing to do business." Four of Fonterra's top officials have been charged with contempt of court in Sri Lanka for failing to obey the ban. The company disputes the results of the Sri Lanka testing, and has suspended its operations in the country. In New Zealand, Sri Lanka's actions are widely seen as a way to pressure Fonterra and promote the local dairy industry. But the protests are just the latest blow for the world's biggest dairy exporter. At the start of the month, Fonterra faced a global food scare, when it said some of its products could contain a bacteria that can cause botulism. Potentially-tainted products were taken off shelves from China to Saudi Arabia, while other countries restricted imports. New Zealand's government has expressed frustration that Fonterra dragged its feet in disclosing the contamination issue. During a visit to China - the biggest buyer of Kiwi milk powder - Foreign Minister Murray McCullum looked to distance the country from Fonterra's problems. SOUNDBITE: NEW ZEALAND FOREIGN MINISTER MURRAY MCCULLY, SAYING (English): "We should be quite clear that there is a job of work to be done rebuilding consumer confidence here. That is something that Fonterra will need to focus on over the coming weeks. And that is a very clear message that I will give them myself." Dairy products are big business for New Zealand, making up a quarter of its export earnings. The government is carrying out an inquiry into the Fonterra contamination scare - looking at how the potentially contaminated products reached the international market, and if enough regulation is in place.

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More trouble for dairy exporter Fonterra

Friday, August 23, 2013 - 02:09