Govt pays $2m to fix Fonterra relationships

Last updated 16:54 11/09/2013
Fairfax NZ

Trade Minister Tim Groser and Primary Industries Minister Nathan Guy announce a market recovery plan to help the companies affected by Fonterra's botulism scare.

Tim Groser, Nathan Guy
FIGHTING FUND: Tim Groser, Left, and Nathan Guy announce a $2 million fund to rebuild business relationships.

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Small firms trapped as the "meat in the sandwich" by the Fonterra botulism scare can apply for up to $20,000 of travel costs to help them mend business relationships.

At a press conference in Auckland this afternoon, Trade Minister Tim Groser and Primary Industries Minister Nathan Guy announced a two-pronged "market recovery plan".

It includes a $2 million New Zealand Trade and Enterprise (NZTE) fund to rebuild relationships and undo the damage done to New Zealand's reputation.

Guy said he and Groser had been in close contact with the export industry, and many businesses reported that they were "hurting" after the scare.

"Part of the reason we have pulled together the market recovery plan is to help them," he said.

The businesses eligible for funding are those that export at least $500,000 of infant formula, other dairy products or finished products using dairy ingredients.

Applicants will be reimbursed for up to $20,000 of travel costs to affected markets, including China, Sri Lanka and Russia.

Groser said companies would have to match the funding dollar for dollar, a method that had worked well with a similar fund set up after the Canterbury earthquakes.

Small and medium businesses in particular had been caught as "the meat in the sandwich", he said.

"I think it will be helpful to those people who have been caught up in this mess; they didn't make this problem," he said.

The fund operates on a first-come, first-served basis, and will be closed at the end of the year.

A full list of conditions along with application forms can be found on the NZTE website.

Groser would not name specific companies, but said the fund was targeted at smaller firms rather than large operators like Nutricia, which had to recall several batches of its infant-formula product.

The compensation status of the eight companies directly affected by the recalled whey powder is still in question.

Last week, Paris-based food giant Danone, which owns Nutricia, said it was "reviewing its recourse and compensation options" over the food-safety scare.

The other key component of the Government's recovery plan is a programme of targeted visits to key markets by ministers and officials.

"Our response needs to be fine-tuned and targeted to the particular needs of each key market," Guy said.

"We already enjoy close relationships with overseas regulators at a technical level, but where appropriate, ministers themselves are prepared to engage to assist resolutions."

Groser said the long-term goal was to re-establish New Zealand's position as a market-leading producer of safe food.

He said officials had put in a huge amount of work in the crucial Chinese market, where things were "stabilising and moving in the right direction".

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"I am confident we will get this right in the long run," he said.

The Ministry for Primary Industries has confirmed that the whey product at the centre of the scare contained Clostridium sporogenes, for which there were no food-safety issues, rather than the potentially deadly Clostridium botulinum.

- Fairfax Media

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