New Zealand Seeks to Restore China Relations After Dairy Recalls

August 22, 2013 05:32 AM

New Zealand’s government will in 10 days notify Chinese authorities of measures it may take to address safety issues in order to restore trade.

William Bi and Liza Lin

New Zealand, whose exports are under threat after China halted imports of some tainted dairy products, pledged to take steps to ensure product safety and regain the confidence of its biggest trading partner.

New Zealand’s government will in 10 days notify Chinese authorities of measures it may take to address safety issues in order to restore trade, Foreign Affairs Minister Murray McCully said at a media briefing in Beijing today. The Pacific country will also require its exporters to meet China standards for its dairy products, he said.

McCully’s visit comes as New Zealand deals with the fallout from two contamination scares linked to dairy products in China, its top trading partner. Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter and New Zealand’s largest company, said earlier this month botulism-causing bacteria were found in whey protein that made its way into the Chinese market. China also temporarily banned some New Zealand milk protein this week after finding elevated nitrate levels in certain products.

The New Zealand government will notify Chinese authorities on "what has happened here, what issues need to be addressed and to provide certainty to consumers that quality food from New Zealand can be relied upon," said McCully, who is on a two-day visit to Beijing as part of a tour of Mongolia, China and Hong Kong.

New Zealand is conducting inquiries into the Fonterra incident, the results of which will be released to the Chinese government in 10 days, the official said. The case didn’t have a significant impact on relations between the two countries, he said.

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, which overtook Australia as the nation’s largest trade partner this year, bought NZ$7.7 billion ($6.1 billion) of New Zealand’s goods in the year through June, NZ$3 billion of which was dairy.

"We have a total and absolute commitment to meeting the standards which would be required for that trade to continue to grow," McCully said.

McCully, who was meeting his Chinese counterpart Wang Yi and State Councilor Yang Jiechi in Beijing, will be followed in a "few weeks or months" by trade minister Tim Groser and Prime Minister John Key, Key’s spokeswoman Kelly Boxall said on Aug. 11.

Dirty Pipe

New Zealand’s troubles began Aug. 3, when Fonterra said a dirty pipe at a processing plant may have tainted whey protein used in dairy formula with bacteria that can cause botulism, a rare illness that may lead to paralysis. China then stopped imports of whey protein and a dairy base powder from Fonterra.

The announcement also prompted companies ranging from infant-formula producers Danone SA and Abbott Laboratories to beverage maker Coca-Cola Co., which used Fonterra’s contaminated ingredients or its production lines, to issue precautionary recalls on the Chinese mainland and in Hong Kong. Gary Romano, managing director of New Zealand Milk Products, also stepped down.

In an Aug. 6 commentary titled "Remembering the Fonterra lesson," the official People’s Daily wrote that China needs more supervision of milk imports and should strictly check all such imports regardless of the brand.

The official news agency Xinhua wrote that buyers were losing faith in New Zealand’s clean image. Theo Spierings, Chief Executive Officer at the Auckland-based company, apologized to consumers in Beijing on Aug 5.

Fonterra was also among six dairy companies fined for violating anti-monopoly laws in China this month.

Milk Protein

This week, 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.

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 on Aug 19. It revoked export certificates for four consignments that were derived from the two batches.

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