Whey report not a magic wand

FOOD SCARE: The serial number of a milk powder tin in Vietnam is checked during the production recall that followed the Fonterra botulism scare.
FOOD SCARE: The serial number of a milk powder tin in Vietnam is checked during the production recall that followed the Fonterra botulism scare.

Dairy exporters still hurting from the Fonterra whey contamination scare that spooked Chinese customers are waiting for the results of a soon-to-be released Government inquiry, an industry group says.

The Infant Nutrition Council, which represents most New Zealand infant formula exports by volume, said the Government's report would clarify for Chinese distributors whether New Zealand's food safety systems were safe.

The report is due out within the next two weeks.

Council chief executive Jan Carey said the report was "very important", even though the botulism scare turned out to be a false alarm.

"Bad news travels fast and good news travels very slowly, and the Chinese consumer is concerned about the perception of safety of New Zealand infant formula."

Thousands of products were taken off shelves when Fonterra announced a test had found clostridium bacteria in three batches of whey protein concentrate, made at a plant in Waikato last year.

Further tests later found it was not the dangerous botulism strain but by then the damage was done.

Some exporters spoken to confirmed New Zealand formula sales in China had taken a hit but they were unsure whether the report would make a difference to Chinese consumers.

"I think most people know what it's going to say," said Gregg Wycherley, managing director of infant formula firm Fresco Nutrition.

"The problem is that the message was pushed very hard that there was a problem with WPC80 [the whey protein at the heart of the scare].

"But the message that it was a false alarm didn't get the same priority treatment from the media in China. So I think it's a political issue."

The extent to which the Fonterra inquiry was reported in China was up to the Chinese Government, he said.

Vitaco Health which exports whey protein powders to China, said China was an "uncertain" environment, with changing dairy regulations as well as confidence issues.

"I don't think this solely relates to what the Government is going to say. There certainly is some reticence in terms of ordering, though," said Vitaco chief executive Geoff Norgate.

David Spurway of New Zealand New Milk said distributors in China would be interested in the report and probably had more confidence in New Zealand infant formula than the person in the street.

But they were at the mercy of what their consumers thought.

"What's affecting their business is how much product is moving off the shelf."

Food Safety Minister Nikki Kaye and Primary Industries Minister Nathan Guy said on Wednesday that the "whey protein concentrate contamination" inquiry would be released in two stages.

A report on the wider food safety concerns that the botulism scare raised would be released before Christmas.

However, the segment specifically on the Fonterra incident would not be released until next year, as it was waiting on a Ministry of Primary Industries investigation.

Carey said the Chinese were more interested in the first part of the report which revolved around food safety and supply chain integrity.

"That's of more concern to the Chinese than the internal issue of how the situation [within Fonterra] was handled."

Fonterra's own independent inquiry concluded that while no single factor or person was to blame, there was a lack of senior oversight on crucial decisions and problems tracing affected products.

A handful of dairy exporters are now considering a compensation claim against Fonterra, including multinational Danone.

Fairfax Media