Prime Minister John Key says the poisoned milk scandal in China -- which killed six babies and left 296,000 others sick -- has damaged New Zealand's image "to a certain degree".

"I think the whole thing is terribly regrettable and, frankly, unhelpful," Mr Key told a post-cabinet press conference today.

Beibei infant formula, produced by Fonterra's Chinese joint venture, Sanlu Group, contained the highest levels of melamine, at 2563mg/kg (parts per million), found in the scandal.

Tainted samples were found among another 21 suppliers but the concentrations ranged from only 0.09ppm to 619ppm.

But Mr Key said that while the Sanlu venture had been destroyed, there had been stronger demand for milkpowders made outside China.

"My understanding is that there has been quite a strong demand for New Zealand-produced formula, so in a sense there is some damage, but I don't think it is affecting what is coming out of New Zealand," he said.

Fonterra has been the biggest exporter of milkpowders to China, separate to those made there by Sanlu, for more than 20 years.

The former chairwoman of Fonterra's joint venture, Tian Wenhua, yesterday lodged an appeal to overturn a life sentence for her role in the melamine milk contamination scandal.

Her lawyer Liang Zikan said Tian had appealed to the Higher People's Court of Hebei province because the judgment in the first trial did not clearly distinguish the facts and "lacked evidence".

Tian was convicted at the Shijiazhuang Intermediate People's Court of manufacturing and selling fake or substandard products.

The life sentence was imposed on January 22 . Tian was also fined 24.7 million yuan ($NZ7.26 million).

The ruling said that at a meeting on August 13, 2008, citing a so-called EU standard, Tian authorised the sale of products that contained 10mg of melamine in every 1kg of milk.

Mr Liang said the standard was not raised by Tian, but rather by a board member designated by Fonterra, which had a 43-percent stake in Sanlu Group.

Fonterra has repeatedly said that it did not tell Sanlu it was acceptable to keep producing formula containing melamine.

Fonterra had three directors on the Sanlu board, Bob Major, Mark Wilson and a Chinese national, Patrick Kwok, but has declined to say which of them gave Tian a European Union document soon after the board was advised of the contamination on August 2.

"Although there was lots of information that was pulled up (about melamine levels) we were vividly clear to Sanlu that the only acceptable level (of melamine) was zero," Fonterra chief executive Andrew Ferrier has said.

"Fonterra consistently pushed for a full public recall of contaminated product from August 2 when we learned of the contamination."

The Xinhua news agency today reported Tian and her lawyers claim the management of Sanlu Group decided to recall and cease selling the baby milk powder containing melamine on August 1 when samples were confirmed as contaminated.

Even if the milkpowder department under the group failed to inform the downstream dealers, Tian should not bear the responsibility, Liang said.

A cattle farmer and milk trader were sentenced to death over the scandal and three other former Sanlu executives received jail terms of five to 15 years for their roles. The Sanlu Group has been made bankrupt.