KEY POINTS:
A Chinese milk powder contamination crisis will not have a big impact on Fonterra's international brand, says James Bickford, director and head of strategy at branding agency Interbrand.
Chinese dairy company San Lu, which is 43 per cent owned by Fonterra, has recalled milk powder blamed for illness in hundreds of babies and two deaths.
The milk powder was contaminated with the plastics chemical melamine, which can raise the apparent protein content in food tests.
Mr Bickford surveyed Interbrand offices in China, Japan, Korea, Australia and the United States asking consultants to names four New Zealand brands - no one picked Fonterra.
However, people who knew and worked with Fonterra trusted the company.
"As a brand Fonterra is more in the business-to-business market. I think that they've built a very solid heritage of trust and loyalty for that brand over a very long period of time.
"I think it's going to be more about the issue of the powdered milk rather than the issue of Fonterra as a brand."
The epicentre of the contamination crisis would be in the Chinese market and the incident would not significantly affect Fonterra's international business developments, Mr Bickford said.
"I think the brand itself is respected with those who work with it and Fonterra's brand will move on from this crisis."
The heat would be on San Lu, he said.
"My advice to San Lu as a brand, though, is that if the heat becomes this much when there are issues surrounding mortality on a brand, I think they'll find it immensely difficult to keep that brand going for the short-to-medium term."
(Disclosure: Interbrand Australia has worked for Fonterra).
