August 11, 2013 / 11:58 PM / 6 years ago

Fonterra starts inquiry into tainted products, NZ govt to follow

WELLINGTON, Aug 12 (Reuters) - New Zealand dairy food giant Fonterra launched an inquiry on Monday into how infant formula products became contaminated with a botulism-causing bacteria, anxious to repair a damaged reputation that has threatened the country’s export trade.

The review led by Fonterra board member Ralph Norris, a former CEO of the Commonwealth Bank of Australia, is expected to take six weeks.

New Zealand’s government is also planning to conduct its own review and is likely to be announce details later in the day. These investigations are in addition to a separate internal Fonterra probe and one launched by New Zealand’s agricultural regulator.

The contamination scare has led to products recalls in countries from China to Saudi Arabia, and Fonterra has come under attack both at home and abroad for dragging its feet in disclosing the discovery of the bacteria during a four-month period between March and July.

“It is critical that we identify ... lessons quickly so our farmers, governments, customers, consumers and unit holders can again have full confidence in Fonterra and its products,” Fonterra Chairman John Wilson said in a statement.

The inquiry comes as Fonterra grapples with another food safety headache after Sri Lankan authorities ordered the company to withdraw milk powder for showing traces of another toxic agricultural chemical dicyandiamide (DCD).

But Fonterra’s chief executive said the product was clean and safe and the company was contesting the Sri Lankan results and the ban.

The latest Fonterra inquiry will comprise four other Fonterra board members, a retired New Zealand High Court judge and a scientist who will be appointed in the coming days, Fonterra said.

The committee was also looking to enlist an internationally recognised expert on food manufacturing safety to review the events leading up to and following the detection of the contaminated product.

New Zealand depends on the dairy industry for a quarter of its total exports and Prime Minister John Key has said he plans to visit China, a key export market, to discuss the contamination issue after the inquiry results are complete.

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