New Zealand Dairy Exporter Loses Clients

New Zealand's massive dairy exporter, Fonterra, is being questioned about its handling of a food contamination scare that resulted in several product recalls around the world.

Government officials were sent to Fonterra in an attempt to "regain international confidence," after the company announced that they sold why protein products which contained a highly dangerous bacteria. New Zealand's agricultural lobby pleaded with Fonterra to be completely open to questions and inquiries about details of the contamination.

Although there have been no reported incidents relating to the affected products, there is a long-term risk of a hit to the country's reputation. The image of New Zealand as being a place that is "clean and green" has the potential to be tainted. The longer Fonterra waits to disclose information on the contamination issue, the more the risk will increase.

As of Monday, the CEO of Fonterra, Theo Spierings, announced that Fonterra would not face a ban in China, only "restrictions on whey protein concentration." The restrictions would then be lifted if Fonterra gave the Chinese regulators details on why and how the product became contaminated.

However, China isn't the only country where Fonterra is losing clients. Hong Kong and Sri Lanka are among the countries that have issued recalls on fresh instant formula milk products. Milk power imports from New Zealand have been suspended in Sri Lanka, as well as in Brunei. Neither of these two locales have been identified by Fonterra as a place of contamination.

Fonterra's mistake could potentially dent the economy. Nearly one-quarter of New Zealand's exports come from the dairy industry.