Fonterra pulls Sri Lankan operations

There are two sides to every story. I would like to get the Sri Lankan side. Fonterra earlier “rubbished” Sri Lankan testing regime – a great way to deal with one's trading partners.

Fonterra suspends Sri Lanka operations after milk powder protests

New Zealand dairy giant Fonterra Co-operative said on Friday it had suspended operations in Sri Lanka after the world's largest dairy exporter faced product bans, court cases and angry demonstrators over its milk products in the country

Reuters,

23 August, 2013

Sri Lanka's food safety authorities have said they found high levels of the agricultural chemical dicyandiamide (DCD) in two batches of milk powder it tested, an accusation that Fonterra has vigorously disputed.

Fonterra halts Sri Lanka operations after protests

Fonterra has temporarily suspended its operations in Sri Lanka because the situation there has become "unstable" for the dairy cooperative giant.

NZ Herald,

23 August, 2013

Chief executive Theo Spierings said the move was a "precautionary step".

He said Fonterra had two priorities: protecting its people, and protecting its farmer shareholders' assets.

"The temporary suspension is the right thing to do," he said in a statement.

"It is a precautionary measure to ensure our 755 people working there are safe. We have closed our plants and office in Sri Lanka, and have asked our people to stay at home."

The Associated Press (AP) reported from the Sri Lankan capital Columbo that a government-allied group protested opposite Fonterra's local office on Thursday demanding that the company respect a court order and withdraw what it said was contaminated milk products from the market.

The protest by about 200 people from the Lakmawa Diyaniyo (Daughters of Lanka) came a day after a court issued a summons to Fonterra Brands Sri Lanka and four of its top officials to face contempt of court charges for allegedly not adhering to an order issued by a Sri Lankan judge last week suspending sales and advertising of all Fonterra milk products, the AP report said.

Spierings said Fonterra had provided assurances to the Sri Lankan authorities about the safety and quality of Fonterra's products, and remained committed to the Sri Lankan people.

"Recent events, however, have made it difficult to maintain day-to-day operations, and we need to get them resolved," he said.

Fonterra Sri Lanka is currently subject to a court "enjoining order" which has shut down its ability to sell product, advertise it or make public statements in any way with customers or consumers in Sri Lanka. Legal action is underway, he said.

"We are also working with Sri Lankan and New Zealand government authorities on a long-term sustainable solution for our Sri Lankan customers, communities and dairy sector,'' Spierings said.

Sri Lanka is a key market for the New Zealand dairy industry, which has had a presence there for more than 35 years.

Fonterra faces protest

Sri Lankan demonstrators shout slogans during a protest against Fonterra products in front of the main factory in Biyagama, about 21 km from capital Colombo, on August 22. Demonstrators demanded that all Fonterra products in Sri Lanka be banned.

A Sri Lankan court on Wednesday issued a summons to Fonterra Brands Lanka, the local company of New Zealand's Fonterra, and four of its top officials to face contempt of court charges for not adhering to an earlier ruling that banned sales and advertising of all Fonterra milk products.

Fonterra strongly refuted the claim and said it believed it had complied with all aspects of the enjoining order.

http://www.tradearabia.com/news/PIC_241418.html

Fonterra to be charged for contempt of court

Daily News (Sri Lanka),

20 August, 2013

Counsel for the petitioner informed the Appeal Court yesterday that despite an interim order by the Courts preventing Fonterra from advertising its products as 100 per cent perfect, the Company was continuing its publicity campaign by distributing hand bills under the signature of its Managing Director claiming its ‘Anchor’ brand products to be 100 per cent safe for consumption.

Counsel for the petitioner stated that papers would be filed against the dairy company for contempt of court because it was continuing its publicity campaign despite court orders not to do so.

He stated the above when a writ petition was taken up in Courts against an advertisement carried out by Fonterra. The Counsel was appearing on behalf of a consumer petitioner.

The Court of Appeal later granted approval to proceed with the filing of the papers on the contempt of court charge and the petition.

The Court of Appeal also extended the interim order on Fonterra to refrain from advertising its products as ‘100% perfect’, till September 3.

Sri Lankan court summons Fonterra officials to face contempt charge

Yahoo,

August, 2013

A Sri Lankan court on Wednesday issued a summons to Fonterra Brands Lanka, the local company of New Zealand's Fonterra (FSF.NZ) and four of its top officials to face contempt of court charges for not adhering to an earlier ruling that banned sales and advertising of all Fonterra milk products.

The district court in Gampaha earlier had banned the sale and advertising of all Fonterra milk products for two weeks, following a complaint by a health sector trade union that the company's marketing was misleading.

It obtained the court ban because Fonterra products suspected of being contaminated with the toxic agricultural chemical dicyandiamide (DCD) were still on the market despite an order from the health ministry to recall them.

Lawyers representing the health sector trade union said despite the court ban, Fonterra continued to distribute its milk powder products to retailers on Saturday and distributed leaflets on Monday saying its products were still fit for human consumption.

"They (Fonterra) are in contempt as they have not followed the court order," Upul Jayasuriya, who appeared in court on behalf of the health sector trade union, told Reuters. "The judge has issued summons on Fonterra and its four directors for August 23."

Officials from Fonterra Brands Lanka Pvt Ltd were not available for comment.

The island nation's health ministry has said tests by Sri Lanka's Industrial Technology Institute (ITI) found DCD in some Fonterra milk powders and it had ordered their recall.

Fonterra disputed the accuracy of the testing, but on Thursday told Reuters it had recalled two batches of Anchor-branded product in accordance with the ministry directive.

The Sri Lankan case follows a major global food scare involving New Zealand's Fonterra, the world's biggest dairy exporter, which said on August 3 some of its products could contain a bacteria that can cause botulism.

Potentially tainted products have been taken off shelves from China to Saudi Arabia while other countries took measures to restrict imports.

On Monday, the health ministry said it had decided to release a batch of milk powder made by companies including Fonterra after being held by ports on suspected DCD contamination followed by fresh ITI tests came negative.

Sri Lanka to test all milk powder for chemical in Fonterra scare

A Sri Lanka state institute said it would test all milk powder in the market after finding a toxic chemical in products sold by New Zealand's Fonterra, while a nationalist party called for the closure of Fonterra's local subsidiary.

Reuters,

22 August, 2013

The Industrial Technology Institute (ITI) found the agricultural chemical dicyandiamide (DCD) in two batches of milk powder it tested - one of Anchor full-cream and another of the Anchor 1+ brand for young children - manufactured between October and December 2012, ITI Chief Executive G.A.S. Premakumara said.

"Now we have decided to test all the milk powder in the market including other Fonterra products," Premakumara told reporters on Thursday.

"It is unfair to say all Fonterra products are DCD contaminated. We did the same test in some Fonterra products that were manufactured after June 1, and we found no DCD in those products," he said.

Milk production is a political issue in Sri Lanka, and the government is working to increase domestic production and reduce imports. Farmers, many of whom own dairy cows, are President Rajapaksa's main voter base.

Tests so far on locally produced milk products have found no DCD.

Fonterra has disputed the accuracy of the ITI testing, but the local company Fonterra Brands Lanka last week told Reuters it had recalled two batches of Anchor-branded products in accordance with the health ministry directive.

Fonterra and its top officials may face charges of contempt of court after a Sri Lankan health sector trade union obtained a court order banning sales, distribution, and advertisement of its milk products.

NATIONALISTS PROTEST

More than 100 members of the National Freedom Front, a hardline nationalist political party in President Mahinda Rajapaksa's ruling coalition, protested on Thursday in front of Fonterra Brand Lanka's head office, 30 km north of Colombo, demanding a ban on all Fonterra products in Sri Lanka.

As riot police watched, they held up banners saying, "We should make our own milk powder", and "Ban toxic yoghourt advertisement immediately", while carrying a coffin with large pictures of all Fonterra brands.

Sri Lankan opposition follows a global food scare after Fonterra said earlier this month that some of its products could contain a bacteria that can cause botulism. Its products have been removed from shelves from China to Saudi Arabia, while other countries have restricted imports.

"Stop filling our children's tummies with toxic milk," Mohammed Musammil, the spokesman of National Freedom Front, told the protestors.

"It is not a difficult task to close down Fonterra for a country which eradicated terrorism. We request all the people to unite to send Fonterra home in the same way they united to end the terrorism."

The Sri Lankan government has made efforts in recent years to popularize fresh milk to boost local production and achieve self sufficiency, helping reduce imports of dairy products by 12.3 percent to $307.3 million in 2012.

Last year, the government ordered state-owned milk company, Milco to buy all the farmers' unsold milk to improve self-sufficiency.