Injunction stops Fonterra selling in Sri Lanka

21:46, Aug 18 2013

Fonterra has confirmed it has received notification of a court order banning the sale, distribution and advertising of all Fonterra milk products to Sri Lanka for two weeks.

The injunction was brought by three individuals who work for a local union, Fonterra said in a market announcement this morning. The order had nothing to do with the Sri Lankan government, it added.

The National Health Services Union sought the order because there were Fonterra milk products still in the market suspected to be contaminated with dicyandiamide (DCD) despite an order from the health ministry that they be recalled. DCD is a nitrate inhibitor used in fertilisers.

"An enjoining order was issued preventing Fonterra ... from (wholesaling), selling and distributing and or selling for agents of all brands of Fonterra products for a period of two weeks," Upul Jayasuriya, who appeared on behalf of National Health Services (Trade) Union, told Reuters last week. The court had also barred advertising by Fonterra's milk products, Jayasuriya said.

Fonterra would not comment last week saying it had not yet received notification of the injunction.

However, this morning, Fonterra managing director Asia Pacific, Middle East and Africa Johan Priem said that the company strongly refuted the allegations on which the injunction had been made.

Independent testing had found no traces of DCD in any Fonterra branded products in Sri Lanka and no affected whey protein concentrate, or products containing it, had been sent to the country, he said.

"We are confident in the quality and safety of our products in Sri Lanka and we are currently working through our legal options there.''

Priem said the injunction did not affect product already on shelves.

The legal action was disappointing in light of Fonterra's long-standing co-operation with Sri Lanka both in terms of supplying high quality dairy products to the country and its commitment to helping develop its domestic dairy industry, he said.

The Health Ministry had said last week a recent local test by Sri Lanka's Industrial Technology Institute discovered DCD in some Fonterra brand milk powders and had directed the world's largest dairy exporter to recall the products.

Fonterra has disputed the accuracy of the local testing, but on Thursday, Leon Clement, managing director of Fonterra Brands Sri Lanka, told Reuters that the company had recalled two batches of Anchor-branded product as the result of the directive from the Ministry of Health and the recall has now been completed.

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