The survival of New Zealand's $9.4-billion dairy trade is under threat over the discovery of tainted whey used in dairy products to eight customers in Australia, China, Malaysia, Vietnam, Thailand and Saudi Arabia.
Following the admission by New Zealand's Fonterra that it discovered three batches of whey ingredient made at its local plant tainted by the bacteria that causes botulism, the Ministry of Primary Industries announced on Saturday the recall of Karicare Gold+ Follow On Formula Stage 2 (6-12 months) with batch number D3183, which turned out have been isolated in an Auckland warehouse, a shop and storage facility in Australia.
On Sunday, the recall extended to Karicare Infant Formula Stage 1 (0-6 months) with batch numbers 3169 and 3170. Shoppers could check if they got the tainted milk by checking those numbers on the base of the tin.
News of the product recall prompted Nutricia, one of the largest suppliers of baby formula in Australia, to clarify that the company is not recalling any of its products even if one of its brands is Karicare.
Nutricia said it has tested negative for the bacteria, while the Australian Department of Agriculture said only on Australian company imported the tainted batch from Fonterra.
Due to the botulism scare, which could lead to death, China has banned all imports of New Zealand milk power. China is the largest buyer of dairy products from New Zealand, mostly milk powder.
Four Chinese companies, including units of Hangzhou Wahaha Group, are said to have possibly imported the tainted Fonterra products.
Other countries are following suit. Russia had placed on hold import and circulation of Fonterra products, according to the ITAR-TASS news agency, while Thailand has ordered the recall of all Fonterra products imported since May.
Fonterra is New Zealand's largest company, while dairy products comprise about 25 per cent of the country's imports.
"This could be quite a big deal for New Zealand's prospects, certainly in the near term ... This is likely to have an influence in the short run on the New Zealand dollar and on markets in New Zealand on Monday," Bloomberg quoted HSBC chief Australia and New Zealand economist Paul Bloxham.