Fonterra to come under microscope once dust settles in food scare, Key says

Fonterra will come under the government microscope once the major issues around a food contamination scare are settled, Prime Minister John Key says.

Ministers have launched an all-of-government approach to Fonterra's discovery of a bacteria that can cause botulism in some of its whey protein concentrate, and will review Fonterra's role once it has dealt with the food safety issues, which are its primary concern, Key told reporters at today at his weekly post-Cabinet press conference.

Fonterra "will need to answer some questions which we can't detail for you today, but they will be around the length of time it took for all of us to know, it will be about the processes it went through from when it first identified there could be an issue to one that was one that was brought into the public domain, and to the general approach to these issues," Key said.

A second review will be into how the monitoring systems work, and Key said his "top-line assessment is that the bureaucracy-side of this issue has performed extremely well over the last 48 hours."

The food contamination scare has prompted Chinese authorities to ban certain products, and Russian authorities to stop all products, and the government is working to keep its trading partners abreast of the issue.

Key said there was "no question" it will damage the local economy and Fonterra in the short-term, though he was more upbeat about the medium and longer-term implications.

Trade Minister Tim Groser told the briefing he hopes the matter will be resolved in a week or two, though that assessment might be too optimistic.

"It would be naïve to think we're going to get away without a bloody nose, but let's hope the damage is limited to that," he said.

(BusinessDesk)

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