Fonterra escapes blanket ban
China is the New Zealand dairy group's biggest customer, accounting for 10 per cent of its total sales of nearly $NZ20 billion last year.
Chinese authorities have suspended imports of whey powder and a whey-based dairy ingredient used in making infant formula, produced by Fonterra or made in Australia using Fonterra's whey ingredients.
Three batches of a whey protein made at Fonterra's Hautapu plant, near Hamilton on the North Island, last year are at the centre of a botulism scare. Fonterra's staple exports - whole-milk powder and skim-milk powder - do not contain whey protein, which is also used in making sports drinks and infant formula sold in New Zealand.
But the taint on New Zealand's dairy-export image remains, with confirmation China has intensified border inspections of Kiwi dairy products and indicated extra testing may start.
The government was "very conscious" of the risk to New Zealand's reputation as a producer of safe, high-quality foods, Trade Minister Tim Groser said. Food accounts for more than half of its exports, which in turn make up about 30 per cent of gross domestic product.
"We sell ourselves and our image and justifiable reputation for having put high-quality food on tables" around the world, Mr Groser said. "That reputation has been got there not by spin but by world-class high performance. That's still intact."
Fonterra, which accounts for about a third of the world's trade in dairy products, said China's decisions were not expected to affect a GlobalDairyTrade auction of dairy products.
Mr Groser said China's actions were "measured" and hadn't affected products such as whole and skim milk powders, which make up 95 per cent of New Zealand's shipments to China.
In New Zealand, baby formula firm Nutricia refused to say whether it would take legal action against Fonterra after being supplied with potentially contaminated whey. Two Nutricia products were recalled at the weekend.
Frequently Asked Questions about this Article…
No — according to the report, China had not imposed a blanket ban on Fonterra products. However, Chinese authorities have suspended imports of certain whey powders and a whey-based ingredient used in infant formula produced by Fonterra or made in Australia using Fonterra’s whey, and they have intensified border inspections.
China is Fonterra’s biggest customer, accounting for about 10% of its total sales of nearly NZ$20 billion last year. The article notes roughly NZ$2 billion of annual sales to China were at risk from the botulism‑risk alert, but that immediate threat eased once no blanket ban was confirmed.
The issue centres on three batches of a whey protein made at Fonterra’s Hautapu plant. Staple exports such as whole‑milk powder and skim‑milk powder do not contain whey protein and were not affected — and those products make up the vast majority of New Zealand’s shipments to China.
Chinese authorities suspended imports of specific whey powders and a whey‑based infant‑formula ingredient, intensified border inspections of New Zealand dairy products, and indicated extra testing may start. Investors should watch for official testing results, changes to import restrictions, and any further recalls or government statements from Fonterra or Chinese regulators.
Fonterra said the decisions by Chinese authorities were not expected to affect a GlobalDairyTrade auction of dairy products, according to the article.
Trade Minister Tim Groser said the government was very conscious of the risk to New Zealand’s reputation as a producer of safe, high‑quality food but described China’s actions as measured and said New Zealand’s reputation remains intact.
Nutricia was supplied with potentially contaminated whey and recalled two products over the weekend. The company declined to say whether it would pursue legal action against Fonterra.
The three batches at the centre of the scare were made at Fonterra’s Hautapu plant near Hamilton on New Zealand’s North Island. Whey protein is used in products such as sports drinks and infant formula, unlike whole‑milk and skim‑milk powders which are Fonterra’s staple exports.
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