New Zealand dairy Fonterra pleads guilty after 2013 food-safety scare

Recall caused infant formula to be pulled off shelves from China to Saudi Arabia

PUBLISHED : Thursday, 13 March, 2014, 9:30pm
UPDATED : Friday, 14 March, 2014, 4:08am


New Zealand dairy giant Fonterra pleaded guilty yesterday to four food-safety violations following a botulism scare last year.

Government officials earlier in the day filed charges accusing the world's largest dairy exporter of processing and exporting products in a way that did not meet standards and then failing to notify officials quickly enough when it became aware of the lapses.

Maury Leyland, a Fonterra manager, said the company immediately filed guilty pleas to all charges. Fonterra faces a maximum fine of NZ$500,000 (HK$3.3 million).

The charges and guilty pleas come a week before New Zealand Prime Minister John Key is scheduled to visit China.

The botulism scare sparked a global recall of infant formula but turned out to be a false alarm. It came after the company processed whey protein concentrate in dirty pipes in one of its factories.

Initial tests indicated the presence of botulism bacteria in the concentrate but later tests found it to be another, less harmful bacteria. The scare led to infant formula being pulled off shelves from China to Saudi Arabia.

The scare in New Zealand was treated with the urgency of a national emergency. That was because the dairy industry drives the economy and companies like Fonterra are able to command a premium in the country's biggest export market, China, because of their reputation for providing high-quality products.

Fonterra is a co-operative owned by 10,500 farmers that enjoys a near-monopoly on New Zealand milk. It has annual revenues of more than US$15 billion.

New Zealand's dairy exports in January totalled about NZ$1.7 billion, almost half of which went to China.

The botulism scare did not appear to dent China's growing appetite for New Zealand milk. Statistics New Zealand reported exports of New Zealand dairy and meat products rose by 18 per cent in the December 2013 quarter when compared to the previous quarter.

Additional reporting by Agence France-Presse