The New Zealand court has ordered Fonterra Ltd to pay a fine of NZ$300,000 ($256,000) for the botulism scare it caused last 2013. The food safety scare had prompted a recall of dairy products believed to be contaminated. It later turned out to be a false alarm but New Zealand's reputation for exporting quality milk products took a hit.
The giant exporter of milk based in Auckland was at the center of an international storm over food safety issues since Fonterra announced a global recall of infant formula in August 2013. Concentrated whey proteins in its baby formula were believed to contain bacteria linked to the deadly disease, botulism. China and Sri Lanka had temporarily banned some milk products from New Zealand after news broke out. Due to the botulism scare that rocked the New Zealand dairy industry, the Fonterra Shareholders' Fund units fell to its lowest level in 2013.
French food company Danone had announced it will be cancelling its supply contract with Fonterra after the botulism scare in 2013. Danone resorted to court proceedings in Singapore and New Zealand to claim compensation from the dairy giant.
After the judge had stipulated the fines, Fonterra said it would not contest the amount. According to Judge Peter Hobbs, New Zealand's reputation for providing high quality milk products was "shaken."
The world's biggest exporter of dairy products had pleaded guilty to four charges of violating food safety laws in the way it handled the botulism scare. Fonterra also acknowledged it did not inform officials soon enough about a possible contamination despite knowing there was a problem.
New Zealand Prime Minister John Key flew to China to meet with Chinese officials on March 17, hoping to restore China's confidence in New Zealand products. He was there to help assure Chinese customers about the quality and safety of New Zealand products.
Mr Key discussed the findings of the inquiry into Fonterra's whey protein contamination incident which caused the recall of millions worth of dairy products around the world, including in China.