Fonterra Products Still Banned by China Eight Months After Scare

A temporary suspension remains in place for exports to China of Fonterra base powder for infant formula and Fonterra whey powder.

New Zealand’s Fonterra Cooperative Group Ltd. said two of its products are still banned by China eight months after a botulism scare that turned out to be a false alarm.

A temporary suspension remains in place for exports to China of Fonterra base powder for infant formula and Fonterra whey powder, spokesman Mike Burgess said in an e-mailed response to questions by Bloomberg News. The products account for less than 3 percent of New Zealand’s total dairy exports to China, he said.

The ban was imposed in August last year, after Fonterra announced a precautionary recall of products due to concerns that a whey protein used in baby formula may have been contaminated by a botulism-causing bacteria. Subsequent tests showed there was no food safety risk.

New Zealand conducted inquiries into the incident and Prime Minister John Key visited China last month to give assurances about the safety of New Zealand dairy exports, the country’s biggest foreign-exchange earner accounting for about a third of total overseas sales. China is the nation’s biggest trading partner.

Burgess said no other Fonterra products remain affected by the scare and that Fonterra is "confident the restrictions will be lifted."

In January, France’s Danone canceled its supply contract with Fonterra and said it’s seeking compensation for last year’s product recall. The world’s biggest yogurt maker estimates the recall caused it a loss of 300 million euros ($415 million) of free cashflow.