Lanka court bans sale of Fonterra milk products

An advertisement for Fonterra’s Anchor powder brand is seen at a shop as a customer walks by in Colombo.

Agencies/Colombo

A Sri Lankan court yesterday temporarily banned the sale and distribution of all milk products made by the New Zealand dairy giant Fonterra, which is under pressure over a global botulism scare.

The Gampaha district court ordered the two-week suspension pending investigations into allegations of contamination.

The order was given following public interest litigation by a nurses’ trade union which accused Fonterra of selling products that could be contaminated with harmful bacteria and a chemical.

“The company is prohibited from selling or distributing all their products, either directly or through agents, for a period of two weeks,” a court official said after a preliminary hearing.

“An enjoining order was issued preventing Fonterra...from (wholesaling), selling and distributing and or selling for agents of all brands of Fonterra products for a period of two weeks,” Upul Jayasuriya, who appeared on behalf of National Health Services (Trade) Union, said.

An official from Fonterra Brand Sri Lanka declined to comment on the court order, saying they had not received the order yet.

Sri Lanka’s Court of Appeal had already imposed a temporary ban on Fonterra advertising.

There was no immediate comment from Fonterra, which last week recalled two batches of milk powder following orders from the Sri Lankan government because of allegations it contained traces of the chemical DCD.

Dicyandiamide, or DCD, is added to pastures to increase agricultural yields.

The recall was unrelated to the global safety recall announced by Fonterra earlier this month after tests turned up a type of bacteria that could cause botulism.

A New Zealand government website says DCD is not toxic and poses no food safety risk but Sri Lanka’s health ministry considers it to be a “toxic chemical.”

Fonterra has said the Sri Lankan government tests that allegedly found traces of DCD were flawed and the results incorrect.

Yesterday’s court action came a day after public health inspectors checked supermarkets for contaminated products.

New Zealand’s government said last weekend products potentially tainted with botulism-causing bacteria included infant formula, sports drinks, protein drinks and other beverages.

Auckland-based Fonterra had insisted that it had not exported any milk or milk product to Sri Lanka which contained the whey protein that was contaminated.

Sri Lanka imported milk and milk products worth $307mn in 2012 with the bulk coming from New Zealand and Australia, the central bank says.

Sri Lanka’s decision comes as Fonterra has placed two of its senior managers on leave, effective immediately, the company has announced.

Managing director of Fonterra New Zealand Milk products, Gary Romano, resigned on Wednesday in the wake of the botulism scare.

Fonterra is continuing its internal operational investigation into the circumstances surrounding the recent recall of whey protein concentrate.

Fonterra Chief Executive Theo Spierings said that placing the two on leave did not pre-empt the findings of the operational review and they will continue to be involved in the ongoing investigation.

The internal operational review will be completed by the end of the month and is looking into the transparency of information in the business, and how that information is escalated to the appropriate levels.

 Fonterra’s Board of Directors is continuing a separate inquiry and the findings from the operational review will be shared with them.