China Halts NZ Exports of Milk Powder
Alleging Bacterial Infection
New Zealand said China halted imports of
milk powders from Fonterra Cooperative Group Ltd. after the world’s largest
dairy exporter warned of a contaminated ingredient. The kiwi dollar fell to an
almost one-month low.
“We understand that China has suspended imports of all whey
protein and milk-based powder sourced from Fonterra, whether exported from New
Zealand or Australia,” the Ministry for Primary Industries said in an e-mailed
statement in Wellington on 3 Aug. Fonterra said Aug. 3 that three batches of a
whey protein made at a New Zealand plant last year may contain bacteria that
can cause a rare illness called botulism.
The restrictions are a blow for New Zealand because China is
its biggest trading partner. Dairy products make up about a quarter of the
South Pacific nation’s total overseas sales, which in turn account for about a
third of economic output. Fonterra collects 89 percent
of the milk produced in New Zealand.
The
New Zealand dollar fell to as low as 76.93 U.S. cents on 3 Aug, the weakest
since July 8, and traded down 1.1 percent at 77.55
cents in Wellington.
The Fonterra Shareholders’ Fund fell as much as 8.7 percent, the most since the securities that track
Fonterra’s dividends and earnings began trading last year, leading the NZX50
Index (NZSE50FG)0.4 percent
lower.
There have been no reports of any illness linked to
consumption of the affected products, Fonterra said.
It’s too soon to speculate on a possible economic impact on
New Zealand, Trade Minister Tim Groser said.
Coca-Cola Co. (KO) in China said it has quarantined some whey
protein it received from Fonterra. Chinese regulators said companies including
Hangzhou Wahaha Group and Danone’s
Dumex brand were among importers of the potentially
tainted ingredient. The products have been recalled, the regulator said. Danone and Wahaha couldn’t be
reached outside of regular office hours.
Russia
has also suspended imports of Fonterra products, the country’s consumer rights
watchdog said on its website. Fonterra Director of Communications Kerry
Underhill said yesterday the company hasn’t had confirmation of that.
The whey protein batches were mixed with other ingredients to
form products from baby formula to sports drinks in markets including China,
Australia, Thailand, Malaysia, Vietnam and Saudi Arabia, the New Zealand
ministry said.
The U.S. Centers for Disease
Control and Prevention describes botulism as a serious paralytic illness.
Coca-Cola
Greater China said in a statement that 25 kilograms of Fonterra’s whey protein
were used in the production of isolated batches of the company’s Minute Maid
Pulpy Milky product. The company said it will recall products from these
batches in China. A further 4,775 kilograms of the whey protein have been
quarantined, it said.
Fonterra,
which said none of its own branded consumer products are affected by the
quality issue, drew about 14 percent of its revenue
from China in the six months ended Jan. 31.