Chinese consumer confidence in foreign milk powder has been shaken after toxic bacteria was found in imported dairy products from New Zealand. The CEO of New Zealand dairy giant Fonterra made a public apology at a media briefing in Beijing, saying that food safety was the company's top priority.

Fonterra's latest milk powder scare is a major blow for New Zealand and it's clean green image. Fonterra CEO Theo Spiering said, "We deeply apologize to those who have been affected by this issue (TRIM). It is our absolute priority to reassure governments and customers which products have an issue."

Fonterra revealed on Saturday that a dirty pipe at one of its New Zealand plants could have contaminated up to 1,000 tons of infant formula, sports drinks and other products sold in seven countries, including China.

The suspect whey product could potentially cause the paralytic illness botulism. Tests were carried out in May 2012 but it's not clear why Fonterra has taken more than a year to go public.

The New Zealand government was quick to respond to the scare. "When you've got a company that's our largest company, our largest brand, our largest exporter, that is the flagship for New Zealand, and your whole business is about food safety and food quality, you'd think they'd take such a precautionary view," New Zealand Prime Minister John Key said.

Russia has banned all Fonterra milk products and China has temporarily suspended Fonterra's whey powder imports, causing the New Zealand dollar to dive.

Liu Peizhi, deputy head of State Food and Drug Administration, said, "We have ordered relevant departments to take quick action and to recall all the affected products. An inspection and investigation will be carried out on the New Zealand imported milk products."

So far there have been no reported illnesses from the contaminated product.

It's the third high-profile food scare for Fonterra and could jeopardize New Zealand's dairy exports, worth more than 10 billion dollars a year.