New Zealand frustrated with China over contaminated baby milk

Other News Materials 15 September 2008 10:53 (UTC +04:00)

The giant New Zealand dairy co-operative Fonterra is frustrated over Chinese authorities' handling of contaminated baby milk formula that has made over 430 infants ill, its chief executive Andrew Ferrier said on Monday.

He revealed that Fonterra, which owns 43 per cent of the Chinese San Lu company that sold the baby food, urged its partner to withdraw it all from sale at least a month before a full public recall was ordered, reported dpa.

But San Lu had no choice but to work within Chinese government guidelines, Ferrier said in a video news conference from Singapore, on his way home to deal with the crisis after cutting short a business trip.

Ferrier refused to speculate when asked whether the Chinese had wanted to cover up the issue prior to the Beijing Olympics.

At least one baby is reported to have died after being given the formula which was manufactured with milk contaminated by melamine, a toxin found in fertilisers and cleaning products, and is blamed for causing kidney stones in the sick infants.

Ferrier described it as "sabotage" but said it was not clear whether the melamine had been added by farmers as a fake protein to bulk up their milk, as has been reported from China, or if it was a deliberate attack on the San Lu-Fonterra joint venture.

He said San Lu had withdrawn the contaminated formula from trade distribution as soon as the board, which has three Fonterra representatives, was advised on August 2, but a full public recall was not ordered until about a week ago, following procedures laid down by the Chinese health ministry.

Calling it a "truly tragic occurrence," Ferrier said there was "still an enormous amount of uncertainty about this" and the Chinese authorities had now ordered a complete recall of all San Lu products.

He said that Fonterra would have preferred that the issue became public much sooner than it did and was happy and relieved it was now in the public domain.

Ferrier said it was a "very serious issue" for Fonterra, which is the world's biggest single exporter of dairy products, selling consumer goods and food industry ingredients to 140 countries.

"We are doing all we can to assist the Chinese government and to put systems in place so that it can never happen again," he said.

Earlier, Prime Minister Helen Clark said she had personally intervened after learning of the problem and directed New Zealand's ambassador to Beijing to tell Chinese officials her government was extremely concerned that the formula was still being sold.

Ferrier said the New Zealand government's intervention had been very helpful.

Fonterra bought its stake in San Lu in 2005 as part of a strategy to get into the fast-growing Chinese market and said the companies had a good relationship but "everybody's going through a very tough time."

China's food industry has been rocked by a number of scandals in recent years, undermining consumer trust in Chinese food exports and increasing pressure from countries like the United States and Japan to improve food standards.

In 2007, toxic pet food and melamine-contaminated meat or wheat protein was traced to Chinese producers, and a food scare in Japan in early 2008 involved frozen dumplings imported from China.