Fonterra 'sorry' for anxiety over contamination

Last updated 18:49 05/08/2013
Fairfax NZ

Mothers talk about the contamination scare over some baby milk formulas.

Theo Spierings
PETER MEECHAM/Fairfax NZ
DAIRY BOSS: Fonterra CEO Theo Spierings rushed to China after the potential contamination was discovered.

Bacteria found in Fonterra dairy products

Nutricia press conference

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No-one has fallen ill after consuming contaminated Fonterra dairy products and the dairy giant acted swiftly when it learned about it, chief executive Theo Spierings says.

"There has not been one child ill across the world. There have been zero customer complaints," he told an Auckland press conference early this evening from Beijing.

Ninety per cent of the Fonterra product implicated in the botulism scare has been located.

"There is still 10 per cent of product out there which is being identified and taken off the shelves."

The contamination affected 38 tonnes of a type of whey protein concentrate Fonterra in May last year produced had been contaminated with the bacteria that can cause botulism.

Spierings said he had offered a "deep apology" over the whey scare to China, where some of the concentrate had ended up. His apology had also been offered to the Chinese media.

"Human errors in life do happen," Spierings said.

The scare had severe consequence that Fonterra was trying to manage.

"I have expressed our strong commitment to China."

Spierings said he would remain in China until the issue was resolved.

He had given Chinese authorities a full technical report this morning on what had happened.

They would hold further talks tomorrow.

He had been pressured on the time scale and said there were hundreds of strains of bacteria. Most were not toxic.

This was explained to the satisfaction of the Chinese.

Director of Fonterra's New Zealand Milk Products division Gary Romano told the press conference there was no indication in March this year that the product was unsafe.

"We did not know until 31st of July [Wednesday last week] that we have an unsafe product."

Once they knew they acted with speed.

Three contaminated batches were sold to eight companies, and some of it was used to make infant formula and sports drinks.

Parents in New Zealand and China have worried their children are at risk of being infected with botulism, which paralyses muscles and can kill.

"We regret the distress and anxiety which this issue could have caused,'' Spierings told reporters.

"Parents have the right to know that infant nutrition and other products are safe.''

He said that milk powder sold by Coca Cola and Chinese food firm Wahaha is safe, despite being given the contaminated whey, because of the heat at which it was manufactured.

The Government has rushed a senior cabinet minister and ministry officials to Fonterra facilities in Auckland, Hamilton and Australia to ride shot gun as they try to firm up the extent of the contamination.

Economic Development Minister Steven Joyce left for Auckland for a high level meeting with Fonterra immediately following a Cabinet meeting today as the Government moved to take charge of stemming fallout from the crisis.

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Joyce acknowledged that changing information from Fonterra about the extent of the contamination meant the Government could not be confident it had the full story yet.

While officials were confident at this stage that no more product lines had been affected they were still not convinced that Fonterra had pinned down all the affected batch numbers.

Part of the problem was a change in computer systems at facilities across the Tasman.

CHINESE MOVES

Fonterra has received confirmation that China has not imposed a blanket ban on its products.

Instead Chinese authorities have temporarily suspended importation of whey powder and dairy base powder (a whey based dairy ingredient used in the manufacture of infant formula) produced by Fonterra, or produced in Australia using Fonterra's whey protein powder as an ingredient (including whey protein concentrate).

China has also increased inspection and supervision at the border for New Zealand dairy products, and indicated extra testing may be required.

The MPI confirmed that rather than a blanket ban on NZ dairy products, China has been quite specific about the range of Fonterra products temporarily suspended.

Whole milk powder and skim milk powder have not been suspended, said NZ Milk Products Managing Director Gary Romano.

Fonterra was continuing to work closely with the MPI to manage food safety concerns in New Zealand and around the world.

"Our top priority is the safety of consumers, and working with customers and regulators to make sure the public is protected."

QUESTIONS BEING ASKED

Before heading into today's Cabinet meeting, Prime Minister John Key admitted he was "staggered" at delays by Fonterra notifying the Government and consumers about the potential contamination.

He said today was not the time for recriminations but he questioned why Fonterra waited until Friday to alert authorities that some products including infant formula might be at risk after it discovered a whey product could contain a bacteria linked to botulism.

Tests first alerted Fonterra to a potential problem in March. The product was manufactured more than a year ago, in May 2012.

Key was not aware of the reasons behind Fonterra's delay in notifying the Government and consumers but there were a lot of unanswered questions.

The Government has promised a thorough investigation into the handling of the scare, but said that it would not pressure Fonterra until food safety issues were resolved.

'MUMS MAIN FOCUS'

A company with baby-care products potentially affected by the contaminated Fonterra ingredient does not know how much the scare will cost it and refused to say if it would take legal action against the dairy giant.

"Our prime focus is to give mums everywhere the reassurance they deserve," Nutricia managing director Australia and New Zealand Corine Tap said.

"We are working closely with Fonterra to ensure we have all the latest information on the contamination issue."

Tap's comments came as the Ministry for Primary Industries (MPI) said it didn't know which potentially contaminated dairy products are, or have been, on sale here.

The admission came after MPI said it received new information from Fonterra which could change the scope of which Nutricia baby-care products may be affected by contaminated Fonterra whey ingredients.

MPI acting director-general Scott Gallacher also admitted that its advice on which Nutricia products parents should avoid contradicted that of the company.

At a media briefing, MPI said two types of infant formula - Karicare Infant Formula Stage 1 for babies from birth and Karicare Stage 2 Follow-on Formula for children from six months old - should be avoided.

Nutricia, a brand owned by food giant Danone, has previously said only certain batches should be avoided. Gallacher admitted parents would find the advice contradictory.

"The Ministry for Primary Industries has not been able to fully trace and track through Nutricia's supply chain which specific batches of its products may contain the contaminated whey protein and which do not."

MPI said it could not establish whether the product batches under doubt had been sold already. It was possibly either Fonterra or Nutricia would give it information which would satisfy it "but in the meantime caution is necessary".

Sixty thousand cans of product in the New Zealand market were subject to the recall.

While the health scare is likely to do significant damage to the Karicare brand and sales beyond the actual value of the affected product, Tap would not put a dollar figure on it.

TIMELINE OF SCARE

Fonterra said on Saturday that a raw ingredient - a concentrated whey product - in some baby formula could contain a bacteria linked to botulism.

The contamination had been traced to a pipe and three batches of whey, which were turned into 900 tonnes of varied food products sold by eight companies in seven countries.

MPI said it had sent officials to Fonterra's factory in Hautapu to physically check that the line which is believed to have caused the contamination was no longer in use.

"What we're seeing is a rapidly evolving state of information," Gallacher said, when asked if MPI believed what Fonterra was telling it.

MPI was questioning why information from Fonterra was still evolving, Gallacher said.

He stressed there was no sign of new contaminated product being discovered.

He admitted questions over Fonterra's account of how the event had unfolded, and how quickly it was brought into the loop, had not been fully answered.

"Ever since we were notified on Friday afternoon we have had a number of conversations with Fonterra and there are a number of questions we have over the timeliness and the timetable leading up to our notification on Friday afternoon," he said.

"Clearly they are important questions, and we're working to get the right answers to that, but at the moment we are fully focused on making sure we deal with the here and now."

There had been no reports of infants of babies becoming sick because of product as a result of the contamination.

Parents are being asked to call Healthline on 0800 611 116 if they have any health concerns. For more information about the product they can call the Ministry for Primary Industries' consumer helpline on 0800 693 721.

MARKET FALLOUT

Fallout from the Fonterra dairy product contamination scare has hit the markets with the New Zealand dollar falling and NZX-listed Fonterra units tumbling.

The dollar fell one cent against the greenback to US77.13c as markets lost trust in "brand New Zealand'' and reacted to the potential breach of trust by the New Zealand dairy industry.

Fonterra's unit price dropped 8.7 per cent to $6.50 in early NZX trading following the uncertainty.

Economists said it was too early to tell what the economic effects for New Zealand would be but that a speedy resolution to the safety scare was vital to avoid a big hit.

The extent of any damage will begin to be measured on Wednesday when the results of Fonterra's Global Dairy Trade auction come through.

- Fairfax Media

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