New Zealand’s handling of last week’s 1080 infant formula poisoning looked like an orchestrated attempt to protect the nation’s most important company, Fonterra, and the key dairy industry.
In a stunning press conference on Tuesday afternoon, the New Zealand Police, the Ministry for Primary Industries and Fonterra, which is Australia’s second largest dairy processor, revealed threats made four months ago to contaminate infant milk formula with 1080 poison if New Zealand did not stop using the pesticide by the end of March 2015.
“It is arguably one of the worst risk scenarios that can happen to a food company,” said Gary Helou, managing director of Australia’s biggest dairy group Murray Goulburn.
Fonterra, hit financially by food scandals in the past, and farmer group Federated Farmers, received the threatening letters, with packets of milk powder contaminated with 1080, in November.
Prime Minister John Key, his cabinet, and security officials were notified immediately and began planning their response.
Last month Synlait Milk and other dairy manufacturers were notified and forced to sign confidentiality agreements by the Ministry for Primary Industries (MPI).
“In recent weeks we informed manufacturers, global infant formula suppliers, grocery distribution companies and retailers, including supermarkets, of the threat,” the MPI said in an emailed statement.
“All New Zealand manufacturers were advised at the same time so they could put in place additional measures, including extra security, which they are doing.”
One source said it looked like an attempt to limit damage to Fonterra by turning the threat into an industry-wide incident.
About one-third of New Zealand’s exports, worth $NZ14 billion ($13.4 billion) a year, are dairy products. The dairy industry accounts for roughly 10 per cent of the country’s GDP.
“Fonterra’s business in New Zealand is so significant it impacts the currency and the whole economy. I have no doubt it has been a closely co-ordinated affair between Fonterra, the government and the police,” one source said.
Before the threat was made public, trading in Fonterra, Synlait Milk and the a2 Milk Company shares were halted by the New Zealand Stock Exchange.
The a2 Milk Company, which intends to list in Australia, has no manufacturing capability and is exclusively supplied by Synlait. Neither Synlait nor MPI briefed a2 Milk before trading in its shares was stopped by the NZX on Tuesday.
After a 2013 scare China maintained restrictions on Fonterra for months despite tests showing the event was a false alarm. China’s response this time has been relatively muted, but there has been extra scrutiny.
Jian Aihua, a food industry analyst with Shenzhen-based CIC Industry Research Centre, said it would significantly affect New Zealand’s milk powder exports. “In China’s market, any sign of trouble related to infant formula can have a serious impact,” Ms Jian said.
Source: Queensland Country Life