Fonterra Withdraws Milk Powder in Further Setback

BEIJINGFonterra, the beleaguered dairy exporter based in New Zealand, has encountered another problem.

The company has been forced to withdraw milk powder destined for China due to high nitrite levels, Reuters has reported. Ian Palliser, a Fonterra executive, cautioned the nitrite levels were "not a food safety issue whatsoever," according to the report.

"The levels were below the New Zealand standards," he was quoted as saying. "This product could have been sold safely in New Zealand."

Still, the development represents a further setback for Fonterra, which faces a government investigation in New Zealand after the company revealed some of its whey protein concentrate was contaminated with a bacteria that has the potential to cause botulism, a rare but sometimes fatal disease.

Dubbed WPC80, the affected whey protein concentrate is used in a number of products including beverages, infant formula and food supplements.

The company said it is unaware of any confirmed reports linking its contaminated products to any illnesses.

Fonterra has traced back the contaminated products to a "non-sterile pipe" at one of its plants. According to the company, it has recalled or detained all the potentially tainted products.

But the New Zealand government has confirmed it will inquire into the matter. Separately, Fonterra has launched two investigations: an internal operational review that the company expects to be completed at the end of the month; and an independent inquiry that was initiated by Fonterra's board of directors.

In the wake of the scandal, the company said Wednesday it has implemented a program that will provide additional quality assurance for its nutritional plants. The program will begin next week at one of its plants before it is introduced to five other facilities, Fonterra said.