Small exporter resigned to dip in volume
A small infant formula exporter expects its sales to be hit in China as they had been before in other scares around New Zealand milk.
Carrickmore Nutrition managing director Chris Claridge said that had been the pattern with the previous New Zealand milk products scares.
This week the Government revealed a threat, delivered in November last year to Fonterra and Federated Farmers, to lace New Zealand infant formula with pest poison 1080, and said while it was likely to be a hoax it had to take it seriously.
Claridge said Carrickmore supplied 3500 stores in China and fed about 25,000 babies and had been exporting retail-ready cans of infant formula to China for four years.
The important factor was to retain confidence in the New Zealand product among its distributors.
Asked if sales had been cancelled since revelation of the 1080 threat, Claridge said he preferred not to go into that. "We know historically there is a reduction in demand."
Existing customers still bought but it was very difficult to gain new ones. "It reduces our competitiveness capability in the marketplace because the Chinese consumers have choice and they are very informed about the choices they can make," he said.
After the botulism scare Carrickmore saw a change in buying patterns with consumers shifting to European brands of infant formula.
The botulism scare in 2013 halted the company's growth and it took Carrickmore six months to recover. "I'm guessing in this case this will be the same."
In past scares forward milk orders paused but then picked up again.
"In the short term yes there is a reduction but in the longer term we hope to come back up."
Carrickmore was one of the few remaining small exporters of infant formula after the Chinese introduced a stringent registration process last year to sell infant formula in China.
The amount of canned infant formula from New Zealand had fallen to about $125 million from about $250m before the scare, Claridge said.
New Zealand had dropped to about 10 per cent of the canned infant formula market in China from 17 per cent earlier. New Zealand used to export 20 million infant formula cans and that had fallen to about 12 million, Claridge said.
Meanwhile milk powder exporters Synlait Milk and Westland Milk say it is "business as usual".
Westland Milk chief executive Rod Quin said its customers continued to show a very reasoned response "and we have had no cancellations or suspensions of orders".
No whole milk powder was held up in China.
Synlait Milk managing director John Penno said indications were that there would be some extra testing for some export markets, though at this point all Synlait's testing was done at external facilities.
- The Press