Dairy giant launches probe after tainted product contained

Chief executive Theo Spierings says affected whey protein and its derivatives have been contained internationally and he is satisfied the contamination scare has stabilised.

Fonterra has launched an investigation into a food contamination scare after accounting for the potentially tainted product.

Chief executive Theo Spierings told a briefing in Auckland all affected whey protein and its derivatives had been contained internationally, and he was satisfied the contamination scare had stabilised.

The dairy company has launched an investigation into the "human error" that caused the failure, and introduced extra testing until the probe is completed, he says.

"An internal investigation has already started and it's also likely that we will go for an external investigation. Fonterra will keep everybody in the loop and informed of our findings."

When asked whether he should resign over the food scandal, Mr Spierings said it was not up for him to comment, and that it was a matter for the board.

The food contamination scare was kicked off on Saturday when Fonterra went public on news it had found the bacteria Clostridium, which can cause botulism, in three batches of whey protein concentrate.

Those concerns have subsided as the contamination appears to have been relatively contained and the New Zealand dollar and units in the Fonterra Shareholders' Fund have recovered from a sell-off on Monday. The units rose 1.2 percent to $7.03 today.

Fonterra's GlobalDairyTrade auction showed the average price of dairy products fell 2.4 percent on a trade-weighted basis, though a record 60,587 tonnes was sold for some $US293.7 million.

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