New Zealand dismisses Sri Lanka Fonterra milk scare

WELLINGTON, August 12, 2013 (AFP) - New Zealand on Monday rejected allegations from Sri Lanka that its dairy products were contaminated with a farm chemical, accusing industry rivals of exploiting fears stirred by a recent botulism scare.

While no infants fell ill after consuming tainted product, the scandal hurt Fonterra's brand in the massive China baby formula market and dented New Zealand's "100 percent pure" image.

Fonterra has faced criticism in the wake of the contamination, which has been blamed on a dirty pipe in a North Island processing plant, for allegedly releasing information too slowly to customers.

"It is critical that we identify these lessons quickly so our farmers, governments, customers, consumers and unit holders can again have full confidence in Fonterra and its products," chairman John Wilson said.

The dairy industry accounts for 25 percent of New Zealand's exports, and the government has already indicated it will conduct its own inquiry into how Fonterra handed the crisis.

Sri Lanka's health ministry has recalled two batches of milk powder made by Auckland-based dairy giant Fonterra, saying it was concerned the product contained the chemical dicyandiamide.
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