Dairy processors are calling for urgent industry-government combined action to stop the New Zealand dairy brand being damaged by pretenders blending and packaging infant formula and dairy products claiming to be Kiwi-made.

Canterbury dairy manufacturer and exporter Synlait said it is aware of at least 35 "front company" brands that have been created claiming to be New Zealand manufactured.

Open Country Dairy chairman Laurie Margrain said his export company has been becoming increasingly concerned over the past year with the "proliferation" of companies blending, packaging and claiming to be New Zealand product for export.

Synlait marketing manager Michael Wan said dairy companies and the Primary Industry Ministry should be leading an effort to address the growing problem.

Margrain agreed there should be collaboration between Government officials and dairy companies "to protect the New Zealand brand".

DCANZ, the dairy company association of New Zealand, was meeting soon and Margrain was keen to see the discussion kicked off here.

The ministry did not respond to calls.

Growing concern in the dairy industry about the number of "front" companies jumping on China's need for safe baby formula and other milk powder and using New Zealand's name has been highlighted this month with Chinese media reports that "substandard" New Zealand-made product is being rejected at China's border.

A report in the People's Daily newspaper said China's Administration of Quality Supervision, Inspection and Quarantine had rejected or destroyed 270 tonnes of infant formula and milk powder in the 14 months to October, more than half of which came from New Zealand and Australia.

The report said imports included 26 tonnes of "New Zealand-made Ioland" formula, rejected because of insufficient iodine content.

Demand for New Zealand dairy product surged after the 2008 melamine poisoning scandal in China, when the industrial chemical was added to infant formula there to artificially boost protein readings and so inflate the price of raw milk used in the products.

Fonterra, which makes up nearly 90 per cent of the New Zealand dairy industry, and sells milk powder domestically to companies which blend infant formula and other product for export to China, had no immediate comment.

Synlait and Open Country said they only sold milk powder to overseas manufacturers.

- © Fairfax NZ News