New Zealand's Fonterra: Culled China milk powder imports not ours

WELLINGTON (Reuters) - Fonterra, the world's largest dairy exporter, said none of its products had been destroyed in China as it sought to allay concerns fuelled by reports that milk powder imports from New Zealand had been culled there.

Initial worries that New Zealand milk powder had been destroyed weakened the New Zealand dollar on Tuesday. The safety of the country's milk products is a sensitive issue for the local currency as dairy products account for around one-third of the country's exports.

Chinese media in recent days reported on spoiled products destroyed or rejected by China's food quality authority (AQSIQ) in November and December, including Chinese brands of infant formula made with powder imported from New Zealand that did not conform to Chinese product specifications.

The AQSIQ also culled batches of Herobaby milk formula imported from Europe that were found contaminated with salmonella, as well as 210 metric tons of Anhydrous Milk Fat from New Zealand and cheddar cheese made by Kraft Foods , both of which had passed their expiration dates, according to the original report in the Nanfang Daily.

"(The AQSIQ's) latest list, published yesterday, refers to a sum total of 97.2 kilograms (of formula) - that's less than four bags of bulk export product," Kelvin Wickham, Fonterra's managing director of Greater China and India, said in a statement on Tuesday.

"None of the items mentioned by AQSIQ were Fonterra products," he added.

Last month, reports that traces of a potentially toxic chemical had been found in a New Zealand milk samples had also prompted some selling in the kiwi.

Foreign milk powder brands and imported formula command a premium in China, following numerous safety scandals involving Chinese infant formula including the deliberate contamination of baby powder in 2008 with melamine that killed at least six babies and sickened 300,000.

The firm at the centre of the melamine scandal, in which Fonterra owned a stake, eventually collapsed. Fonterra now sells New Zealand milk ingredient products into China and also operates three dairy farms in Northern China.

Chinese news reports routinely highlight any safety issues with imported formula.

(Reporting by Naomi Tajitsu in WELLINGTON and Lucy Hornby in BEIJING, additional reporting by Huang Yan in Beijing; Editing by Himani Sarkar)

Source: http://news.yahoo.com/zealands-fonterra-culled-china-milk-powder-imports-not-052925132--finance.html

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