New Zealand dairy giant Fonterra locked in battle with Sri Lankan health authority

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New Zealand dairy giant Fonterra locked in battle with Sri Lankan health authority

By Uditha Jayasinghe (Xinhua) 16:09, August 09, 2013

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Sri Lanka's Court of Appeal issued an order Friday to prevent Fonterra Brands Lanka (Pvt) Ltd., which is locked in a battle with local health officials over allegations of contaminated milk powder, from publishing any advertisements in the "manner and style deceiving the consumers and public that the products imported by them are 100 percent perfect."

Fonterra, which is the world's largest dairy exporter, has been accused of having dicyandiamide (DCD) in its milk power, a chemical used in fertilizers to prevent them from soaking into rivers, which can be toxic in large amounts.

Fonterra has a large footprint in Sri Lanka with 65 percent market share that climbs to 76 percent when yoghurt is included.

The company, which operates both a powder and liquid plant in the island, has pledged to recall the milk but insists that it was done as a conciliatory measure to reduce panic and work with government health authorities and is emphatic that the stock does not contain DCD.

The milk was distributed in March.

Sri Lanka's Health Ministry initially claimed that they had not found any traces of DCD in milk samples they had sent to Thailand for testing. However, another government entity found traces of DCD in four imported milk powder samples.

Tests done by the Industrial Technology Institute (ITI) ultimately became the foundation on which the Sri Lankan government demanded withdrawal of 39 metric tons of milk powder.

Fonterra has countered the claim and insisted that independent laboratory tests have confirmed that there have been no DCD detected in milk products distributed in Sri Lanka and is willing to work with ITI to correct its test results.

The company is adamant that while DCD has never been a food safety risk, since June 1, 2013, every single batch of Fonterra product entering Sri Lanka has been tested for DCD, using methods specified by the Sri Lankan Ministry of Health.

As many as 202 tests carried out on Fonterra branded products by independent and internationally recognized testing laboratories, AsureQuality and the Cawthron Institute show no traces of DCD. "Fonterra takes its responsibility on safety and quality very seriously. That is our top concern and we are dedicated to being completely transparent with you and the public of Sri Lanka on matters of food quality and safety,"Fonterra Brands Sri Lanka Managing Director Leon Clement told media.

He went onto point out that there is widespread"confusion" among the public of Sri Lanka at the moment and panic that all products are impacted by this recall and stressed that this directive is limited to two selected batches and the rest of Fonterra products are unaffected and safe for consumption. "I'd like to talk to you about this substance called DCD and I actually have some with me here. I also want to assure you that none of our products in Sri Lanka contain DCD and finally I'd like to talk about the test method that has been used in Sri Lanka as basis of the request from the Health Ministry to recall our products." "In my right hand I have a small packet of common table salt, in my left hand there is a sample of DCD. All of us consume table salt on a daily basis, what is in my right hand is far more dangerous and hazardous than DCD. It has higher acute toxicity and it has higher chronic toxicity and this data is available as part of the U.S. Environmental Protection Agency,"he said pointing out documents released by the European Commission saying DCD is not harmful for humans. "So this sample of DCD is completely harmless, right,"he said holding up a small vial."so I have just tasted DCD and it is completely harmless,"Clement stressed as photographers frenziedly captured the moment of him putting a finger into the tiny granules and then into his mouth.

Pressured by doctors and the New Zealand government's botulism alert, which was issued over the weekend resulting in China and Russia recalling milk products from that country, Health Ministry officials on Thursday decided to suspend sales of all milk products imported from New Zealand, particularly those from Fonterra.

Sri Lanka's neighbor Maldives has also pulled Fonterra products off shelves, media reported.

Responding to a question by Xinhua Clement stated that the company is yet to calculate its losses from the DCD and botulism scare but it could run to tens of millions given its high presence in the local market.

According to the Fonterra website, its powder plant in Colombo' s outskirts packs 475 000 packs of milk each day and blends 5270 metric tons of milk powder every month. Its liquid counterpart processors half a million yoghurt cups a day producing 10,370 tons of cultured products, 850 tonnes of pasteurized milk and 2460 tonnes of UHT products every year. Some of the liquid dairy is procured from 4000 odd local farmers.

Fonterra is New Zealand's largest company with revenues of around 20 billion New Zealand dollars (16.8 billion U.S. dollars), with 90 percent of the milk collected being exported around the world.

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