MPI to release first report on Fonterra food scare today, Groser says

The Ministry for Primary Industries will release its first report into the Fonterra Cooperative Group food scare later today as government officials and the dairy exporter undertake several investigations to get to the bottom of the contamination.

Trade Minister Tim Groser told the Wellington Chamber of Commerce the government has been focused almost solely on the health issue from contamination of some whey protein concentrate with bacteria that can cause botulism to trace the tainted product, identify it and remove it from the supply chain.

"As will become apparent when the acting chief executive of MPI issues a comprehensive report later today - and I will put it very simply - that first part of the job has been done," Groser said. "Please be conscious that this is not the end of the process. There will be a range of inquiries yet to come of which we expect the Ministerial Inquiry will be the most authoritative."

Groser's speech comes amid fresh reports Fonterra products have been held up at Bangladesh's border by customs officials. New Zealand's biggest company has faced bans on some products in China, Russia, Belarus, Kazakhstan and Sri Lanka. It has also had to close its local office in Sri Lanka in the face of nationalist protests.

New Zealand's relationship with China, the country's second-biggest trading partner behind Australia, is in good heart, and the government's response to the scare is being watched by other nations, Groser said.

Those fears haven't dented international demand for Fonterra's products, which have sold at record volumes in the past two online dairy auctions, and the Auckland-based company yesterday hiked its forecast payout to farmer-shareholders by 30 cents to $7.80 per kilogram of milk solids in the 2014 season.

"In the market place some damage has been done, and we are not in clear and calm water yet," Groser said. "Some companies, particularly those without heavyweight balance sheets, are unquestionably feeling the pressure."

The government is working with smaller commercial players to find a way to deal with any potential trade problems they are facing, he said.

"There is a whole range of discussions underway - technical, political and commercial - addressing related, but often quite distinct aspects of the problem, some of which (the administrative mistakes over meat certification to China for example) have absolutely nothing to do with food safety but which are part of the mix," Groser said.

Earlier this week Prime Minister John Key said Groser, Foreign Minister Murray McCully and Economic Development Minister Steven Joyce are discussing ways to get more trade specialists on the ground in key markets.

(BusinessDesk)