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China Halts Some N.Z. Imports in Second Case of Tainted Milk

August 19, 2013

The halt comes just weeks after a botulism scare endangered trade ties between New Zealand and its biggest dairy customer.

Matthew Brockett and Tracy Withers

Aug. 19 -- China halted imports of some tainted New Zealand dairy products for a second time this month as the government increases scrutiny of foreign goods.

China imposed a temporary ban on a milk protein made by New Zealand’s Westland Milk Products after finding elevated nitrate levels in some of the product, the General Administration of Quality Supervision, Inspection and Quarantine said in a statement on its website. The halt comes just weeks after a botulism scare endangered trade ties between New Zealand and its biggest dairy customer.

"Food safety is one of the very top issues China has to deal with," James Roy, a senior analyst at China Market Research Group in Shanghai, said by phone. It is a signal that China will treat food safety as seriously as possible and the country is willing to adopt a "strong effort," he said.

China’s import ban is the latest sign of heightened scrutiny of foreign goods in the world’s most populous country. It barred some New Zealand dairy products earlier this month after Fonterra Cooperative Group Ltd. identified a potentially contaminated whey protein that could cause botulism. China also fined dairy companies for fixing prices of infant formula.

Worse Time

Two batches of lactoferrin milk protein made by Westland and exported to China contained levels of nitrate that exceeded the New Zealand standard, the Wellington-based Ministry for Primary Industries said today. It revoked export certificates for four consignments that were derived from the two batches.

"It’s not a food safety issue, it doesn’t present a threat to Chinese consumers," Prime Minister John Key said at a press briefing in Wellington. "But it’s certainly unhelpful and probably couldn’t have come at a worse time."

Dairy is New Zealand’s largest foreign exchange earner, accounting for 28 percent of overseas sales in an economy where exports make up about a third of output. China bought NZ$7.7 billion ($6.3 billion) of New Zealand’s goods in the year through June, NZ$3 billion of which was dairy.

Earlier this month, China fined six companies including Fonterra, Mead Johnson Nutrition Co. and Danone a combined 669 million yuan ($109 million) for price fixing, a record penalty for violating anti-monopoly laws.

Price Fixing

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