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NZ worries about China dairy bans as Fonterra hit by more recalls

Customers talk to a sales assistant as they shop for milk powder in front of shelves displaying imported baby products at a supermarket in B
Customers talk to a sales assistant as they shop for milk powder in front of shelves displaying imported baby products at a supermarket in B

By Naomi Tajitsu

WELLINGTON (Reuters) - Dairy giant Fonterra was hit by fresh infant formula recalls in China and Hong Kong on Tuesday, while New Zealand's government fretted that the widening contamination scare would prompt China to extend a ban on whey protein powder to other dairy products.

Government officials rapped Fonterra, the world's biggest dairy exporter, for dragging its feet in identifying whey protein products containing a bacteria which can potentially cause botulism.

New Zealand Trade Minister Tim Groser said there was a risk that China, a major importer of New Zealand dairy ingredients including powder used in infant formula, may block more products.

"So far, (there has been) very limited action. But this is likely to change, and it would change in the direction of wider, not narrower," Groser told reporters.

There have been no reports of illness resulting from the affected products so far, but the contamination caused by a dirty pipe at one of Fonterra's New Zealand plants has damaged the country's "clean green" image and threatens to scar its dairy export trade.

Groser's comments come one day after Fonterra Chief Executive Theo Spierings said that the company was not facing a ban on its products in China, only restrictions on whey protein concentrate. He added that he expected the curbs would be lifted early this week as soon as Fonterra provides Chinese regulators with a detailed explanation of what went wrong.

China's consumer quality body on Tuesday said it had ordered a recall of two batches of milk formula brands marketed by Abbott Laboratories, a day after some of the U.S. healthcare company's products were recalled in Vietnam.

In addition, Cow & Gate has recalled 80,000 cans of one type of its stage-three baby formula in Hong Kong and Macau. It said there were no signs of contamination in any of the products sold in the two regions.

More infant formula tins were also cleared from New Zealand supermarkets after Nutricia, a Danone subsidiary which manufactures the Karicare brand, announced a blanket ban on two of its infant products late on Monday.

"We've got an issue of confidence here (with) Fonterra," Economic Development Minister Stephen Joyce told Radio New Zealand. "It's certainly pretty frustrating."

Products containing the contaminated whey protein also have been sold to Malaysia, Saudi Arabia and Thailand.

Groser said Russia had not announced a ban on dairy imports from New Zealand. Media reports late last week said that the major dairy consuming country had blocked New Zealand products.

(Additional reporting by Jonathan Standing in Beijing and Anne-Marie Roantree in Hong Kong; Editing by Edwina Gibbs)

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