- The Fonterra baby formula botulism scare revealed New Zealand's reliance on the $16 billion dairy monopoly responsible for 10% of that nation's economy.
- The dairy giant announced Saturday that unsanitary pipes led to the presence of botulism-causing bacteria in its infant formula whey concentrate, and despite the company resolving the issue by Wednesday before any babies were sickened, important markets like China had their trust in the company shaken.
- Fonterra's dairy exports are higher than New Zealand's lamb, beef, fruit and wine exports combined, but continuing problems—and the baby formula issue isn't the first—could spell the end for its monopoly.
From the article:
... Robb warned that Chinese consumers are more concerned with price and quality than with remaining loyal to a particular brand. He said New Zealand risks losing its credibility and customers in China because of the latest scare.
Fonterra ran into problems even before the botulism incident. In January, the company announced it had detected trace amounts of the agricultural chemical dicyandiamide in some of its products, prompting alarm and a ban on the chemical’s use on New Zealand farms. On Wednesday, China announced that Fonterra was one of six milk suppliers it had fined for price-fixing, imposing a penalty on the company of 4.5 million yuan ($720,000). ...