N.Z. Expects to Avoid Immediate Economic Harm From Dairy Ban

New Zealand’s government expects the economy will avoid any immediate harm from suspension of sales of some dairy products to China after the identification of a bacterial contamination that could cause botulism.

“So far, the immediate damage economically to New Zealand is extremely limited,” Trade Minister Tim Groser told Bloomberg Television’s Rishaad Salamat in an interview today.

China has imposed a ban on imports of whey powder and another ingredient made from whey protein concentrate, after Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said on Aug. 3 it had found contamination in a batch of the concentrate. Baby formula makers Danone and Abbott Laboratories, which either used Fonterra ingredients or packaged their milk at the company’s production lines, said they took precautionary recalls.

Fonterra, which makes up about a third of the world’s trade in dairy products, said China’s decisions aren’t expected to affect a GlobalDairyTrade auction of dairy products including milk powders later today.

“Fonterra is confident the product offered on GlobalDairyTrade will meet any additional inspection or testing requirements that may be imposed by Chinese authorities,” the Auckland-based company said in a statement on the auction website yesterday.

Groser said China’s actions are “measured” and haven’t affected products such as whole and skim milk powders, which make up 95 percent of New Zealand’s shipments to China.

The government is “very conscious” of the risk to New Zealand’s reputation as a producer of safe, high-quality foods, he said. Food exports comprise more than half of the South Pacific nation’s annual exports, which in turn make up about 30 percent of gross domestic product.

“We sell ourselves and our image and justifiable reputation for having put high-quality food on tables” around the world, Groser said. “That reputation has been got there not by spin but by world-class high performance. That’s still intact.”

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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