Fonterra faces US inspection

One of Fonterra's biggest rivals in global yoghurt markets, France's Danone, is paying for United States dairy inspectors to inspect New Zealand dairy factories.

Stonyfield Farm, based in New Hampshire but controlled by Paris-based Danone, is the world's largest producer of organic yoghurt and wants to buy organic milk from Fonterra's farmers in New Zealand.

But Stonyfield said that to import the milk, it needs Fonterra to be listed on the US Government's list of approved "interstate milk shippers".

It has not explained how Fonterra and its legacy companies have been able to ship millions of tonnes of milk products to factories all over the United States for decades without such a listing. The only foreign companies on the list are from Canada, Spain and Greece.

Last week New Hampshire Governor John Lynch and his legislature's fiscal committee approved a plan to have Stonyfield pay US$60,000 ($87,000) for state dairy inspectors to come to New Zealand, the Boston Globe newspaper reported.

The inspections - required but not funded by the federal Government - will involve two food protection workers making four trips to New Zealand and one state laboratory worker making a trip.

To satisfy basic American organic standards, Stonyfield needs milk from cows with access to fresh air and pasture that have not been treated with genetically engineered rBGH, a recombinant bovine growth hormone used on American farms.

Fonterra said earlier this year that it wanted its farmers producing 17,000 tonnes of organic milk by 2009.

Fonterra's specialty milks co-ordinator Timothy Bunnett said Fonterra needed the supply to satisfy its "class one" customers.

If it wins approval as an interstate milk shipper, those customers will include Danone, which owns New Zealand's Griffin's, Cookie Bear and Eta biscuits and snack foods companies and the Mizone, V and H2GO drinks operations of Frucor.

The French company bought 40 per cent of Stonyfield in 2001 and built the stake to 80 per cent last year.

Up to that point Stonyfield had been notable as an entrepreneurial success story.

It was started in 1983, by activists Gary Hirshberg and Samuel Kaymen, armed with a yoghurt recipe and seven cows.

They cashed in on the growing health concerns of the baby boomer generation and rejuvenated New England's small dairy farms.

- NZPA