Vietnam puts NZ whey protein imports under scrutiny

Vietnam has put checks in place to ensure the quality of dairy products using whey protein concentrate made by Fonterra and has recalled affected products but has not implemented an outright ban on imports from New Zealand's biggest company.

The extent of trade bans on New Zealand products has been unclear with international media fingering China, Russia, Vietnam and Sri Lanka as imposing suspensions.

Trade Minister Tim Groser told Parliament yesterday only China has suspended imports of certain products, while Russia, Singapore and Vietnam have recalled affected products, and Malaysia, Thailand, Vietnam, Singapore, Australia, Saudi Arabia, Hong Kong are reviewing the situation.

The Vietnam Trade Office told BusinessDesk in an emailed statement its Food and Safety Department was informed of Fonterra's potential food contamination on August 3 and says the department wants companies to check and report on dairy products containing the whey protein.

"The department has requested all companies which do business on dairy products to check and make reports on importing, trading and using protein concentrate ingredients and products containing whey protein concentrate materials produced by Fonterra - New Zealand," the Vietnam Trade Office said.

"Any raw material, products of lots of warned by the Ministry of Primary Industry of New Zealand must be recalled and reported immediately to the Department of Food and Safety." 

New Zealand's Ministry of Primary Industry has recalled two Nutricia Karicare infant formula products.

Finance Minister Bill English yesterday told Parliament the export value of the two potential tainted products to China was $125 million, or about 0.25 percent of total exports.

"There is some longer-term risk, of course, of effects to our reputation, but, if these circumstances are managed transparently and effectively, we ought to be able to reduce those risks," he said.

"The economic impact of the amount of product currently under restrictions is sufficiently small and would not have a discernible impact on our GDP (gross domestic product)."

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 which had affected eight of its customers.

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.

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.