Fonterra milk powder destroyed

LAURA WALTERS
Last updated 12:50 07/03/2014

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Fonterra has ordered the destruction of 130 tonnes of milk powder in Sri Lanka worth more than $700,000.

Sri Lankan media reports say the New Zealand dairy giant asked that the milk powder, imported before June 1, 2013, to be destroyed.

The milk powder had been held since last year when there were Sri Lankan concerns about possible contamination by the fertiliser aid dicyandiamide (DCD).

A Fonterra spokesman, who would not be named, said the disposal of the powder was because it was nearing its expiry date and destroying it was in accordance with normal procedure and in line with regulations within Sri Lanka.

Based on this week's GlobalDairyTrade auction prices the 130 tonnes of powder had a value of nearly $708,000.

The disposal of the milk powder was the latest development in the saga relating to the low-level contamination of some of Fonterra's dairy products by DCD in 2012.

Fonterra undertook tests for DCD in September 2012, two months before the Ministry for Primary Industries (MPI) was alerted. Fonterra announced the contamination to the public in January 2013.

Sri Lanka started testing all imported milk powder for DCD in July last year.

In August last year Sri Lankan officials ordered a recall of dairy products after they said DCD was found in two batches of imported milk powder.

However, Fonterra disputed DCD traces were present in the product in Sri Lanka and said the testing regimes were flawed. The nitrate inhibitor is added to fertiliser and New Zealand officials say it is not dangerous.

The Fonterra spokesman said the 130 tonnes of powder being destroyed had been held since the recall last year and was now nearing its expiry date so would not be fit for public consumption.

The disposal of the product was in line with normal procedures and he said the media had blown the destruction of the powder out of proportion.

Last year's announcement of the DCD contamination caused the international community to question Fonterra's level of food safety.

In August last year one Sri Lanka newspaper said New Zealand milk was "not fit for consumption" and described the company as behaving like a "stereotypical multinational".

Other coverage however pointed to a fierce battle for milk share in Sri Lanka and a potentially incompetent milk-testing regime.

According to Sri Lankan media reports from last week a Sri Lankan Health Ministry spokesperson said Fonterra made the request because testing small consignments of milk powder for DCD was not economically viable.

Sri Lanka is New Zealand's fifth-largest milk powder export market and the company has a processing plant in Sri Lanka employing about 750 people.

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