Fonterra faces ban, denies claims

SALES HALT: A policeman with milk powder in Colombo. PHOTO/AP

Fonterra, the world's biggest dairy exporter, faces a 14-day temporary ban on selling products in Sri Lanka, and denies claims its products still contain traces of a nitrate inhibitor that sparked a food scare this year.

Three workers representing Sri Lanka's National Health Services Union have won a temporary injunction to stop the Auckland-based company from selling its products in Sri Lanka, although that didn't affect food already on shelves, Fonterra said.

The Sri Lankan Government wasn't involved in the action.

"Our independent testing has found no traces of DCD in any Fonterra-branded products in Sri Lanka and no affected whey protein concentrate or products containing it have been sent to the country," said Johan Priem, Fonterra managing director, Asia Pacific, Middle East and Africa.

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

The order was sought amid suspicions the dairy products contained traces of dicyandiamide, the nitrate inhibitor found in some of Fonterra's milk powder last year which led to the voluntary withdrawal of fertilisers using DCD.

The court action came amid a wider scare about the quality of Fonterra's goods after it discovered bacteria that could cause botulism in three batches of whey protein.

The find led to limited import bans on affected products in China, Russia, Belarus and Kazakhstan.

The contamination was confined to 38 metric tonnes of whey protein concentrate (WPC80) manufactured at Fonterra's Hautapu plant near Cambridge and first picked up at a plant in Australia. It was used in the manufacture of infant formula, juice and dairy beverages, yoghurt, body-building powder and animal stock food.

The threat to New Zealand's reputation with Chinese consumers has put the Government into over-drive to head off the risk, and it is fast-tracking legislation to allow a speedy inquiry. The latest scare led to NZ Milk Products managing director Gary Romano's resignation last week. BusinessDesk