Pharmaceutical & Food
Fonterra's history in China
Last Updated: 2013-08-05 13:55 |
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Fonterra is one of the world's largest dairy processors. It exports a third of New Zealand's milk powder to China. And its chief executive is on his way to China in an attempt to limit the damage from the scandal.

Q: Fonterra has been operating in China for many years. And this is already the company's third infant formula scandal in six years. Give us some background into the company's past troubles?

A: Well, the company has experienced three infant formula controversies over the past years in China. It all started in 2005 when the company signed an agreement to purchase a 43 percent stake in the Sanlu Dairy Corporation in China.

They set-up a joint venture the next year. But three years later, Fonterra's investment in China was dealt a heavy blow with the infamous infant formula "melamine scandal". It was revealed that infant formula produced by Sanlu was tainted with the industrial compound melamine. Six babies died as a result, and thousands more were made sick with kidney stones. Because Fonterra's own brands, Anlene and Anmum, were also run by the Sanlu company, both brands were forced to withdraw from the Chinese market.

In 2009, Anlene and Anmum came back to China, with all ingredients now imported from New Zealand. However, concerns were raised again this January after the chemical DCD was detected in its products. Fonterra maintained that the small amounts of the chemical that were found are not harmful. And its dairy products continued to be distributed in China.

But on Saturday, the company's whey products were found to contain the toxic bacteria Botulin, further damaging the reputation of the famous dairy processor. Fonterra's CEO said in a statement that the company is doing everything they can to alert the public and assist their customers in ensuring any affected product is removed from the marketplace.

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