WSJ Blows the Lid on Fonterra Tainted Milk Scandal, NZ Government Knew Months Ago – updated

The Wall Street Journal has blown the lid on how long Fonterrra has known that New Zealand milk has been tainted with the melamine-related chemical “Dicyandiamide, or DCD–a substance that in high doses is toxic to humans–in milk powder“. A three year long trial of the novel product only finished in New Zealand early last year.

It’s not looking good for the small dairying nation because it seems that the problem was known about at least as far back as September, two months before a half billion dollar stock market venture for the company in late 2012.

And what’s worse, the WSJ says it looks like the New Zealand government advised Fonterra that the “low levels of DCD found in its products weren’t a concern.”

In a report headed “Fonterra Knew of Tainted Milk Before Fund Launch” The WSJ said that the world’s largest exporter of dairy products, Fonterra Cooperative Group Ltd:

“knew of the presence of DCD in New Zealand’s milk supply before launching a new shareholder fund late last year.
The company said it chose not to disclose the chemical findings before launching a 525 million New Zealand dollar (US$438.9 million) fund last November because it wasn’t “material” information. The Shareholders’ Fund gave investors access to the cooperative, which produces about a third of the world’s traded dairy products and had revenue of NZ$19.8 billion in the year to July 31, for the first time…”

The WSJ went on to make the link between Fonterra and the 2008 Sanlu tainted milk scandal in China where baby formula had been contaminated with melamine, causing the death of at least 6 Chinese children and causing a further 300,000 to become sick.

Fonterra held a sizable stake in the Chinese company, which claimed the NZ giant had advised it about permitted levels of Melamine. Sanlu’s former chairwoman,  Tian Wenhua,  testified at her trial:

“that she made the decision not to halt production of the tainted products because a board member, designated by New Zealand dairy product giant Fonterra that partly owned Sanlu Group, presented her a document saying a maximum of 20mg of melamine was allowed in every kg of milk in the European Union,” Xinhua said. “She said she had trusted the document at that time.” source NZ Herald

The WSJ also emphasised that Fonterra was sensitive to milk scares  because of theirpotential impact on the nation’s dairy exports, valued at NZ$11.5 billion annually.”

Those exports account for nearly a third of all New Zealand’s exports.

Last Thursday New Zealand’s government came clean about finding DCD.

“New Zealand’s reputation is based on the high quality of food we produce,” said Carol Barnao, deputy director of general standards at New Zealand’s primary industries ministry, which is responsible for exports and protecting the nation from biological risks. A government study of DCD use is now under way.

Some countries have a “zero tolerance” policy for chemicals in food products, making it a potential trade issue, the Fonterra spokesman said Friday…”

A potential trade issue that New Zealand has likely known about for the past 5 months. Fonterra is not thought to be recalling any of its products. Two days ago its FCO, Jonathan Mason,  announced his intention to retire in five months from now. source .

Coincidentally the news broke about DCD/DICY in New Zealand milk within hours of China approving a new dairy export certificate with the U.S. 

The certificate is an assurance from the U.S. government to the Chinese government that the U.S. dairy products were produced in a regulated, safe and sanitary system and from milk from disease-free animals and are free of residues, such as hormones and pesticides.

It’s one of the critical pieces of documentation required to export to China, said Matt McKnight, USDEC senior vice president of market access and regulatory and industry affairs.

The health certificate had to be renegotiated after China underwent several changes to its food safety laws and guidelines, he said.

“There never was a concern with the safety of our product,” as evidenced by China keeping its markets open to U.S. dairy products throughout negotiations, he said…” more here

New Zealand dairying a victim of its own success

Far from being a clean, green 100% pure country New Zealand has significant pollution problems caused by its dairying industry, from nitrate run-off leaching onto land and into freshwater to agricultural chemicals building up in its environment.

Some graziers in New Zealand add extraordinarily high levels of nitrogen to their pastures in order to maximise the protein content of their milk, up to 250 pounds (113kg) per acre per year in some instances. DCD is added to fertiliser to slow down the release of nitrates, effectively making the nitrogen slow burn. Some say that this over-reliance on chemicals is unsustainable and could be  symptom of poor pasture management, there are more environmentally beneficial ways of getting nitrogen into the soil – the use of legumes such as clover, for instance.

One of New Zealand’s rivers – The Manawatu – is among the most polluted in the world and many beaches suffer pollution from stormwater and waste water overflows making them unsafe to swim on. Read our Green Credentials or Greenwash wiki page for more information.

More about DCD

DCD is a chemical which slows down the activity of bacteria that converts animal waste into nitrates. It is applied to pastures where dairy herds graze where it has the potential to enter the food chain.

“Dicyandiamide is used in slow and continuous nitrogen release fertilizers, as a fire proofing agent, and in epoxy resins for laminates.

Commonly known as dicyandiamide (DICY), the white crystalline compound is the dimer for cyanamide or for cyanoguanidine. The primary use of the chemical is in the production of melamine, but it is also as a curing agent for epoxy resins.

DICY crystals melt at 45° C, and are soluble in water and alcohol.” source

New Zealand’s two biggest  fertiliser companies Ravensdown Ltd  and Ballance Agri-Nutrients Ltd., both famer owned co-operatives, have now suspended sales of  DCD.

Permeates in NZ milk

The DCD scare comes months after it was revealed that New Zealand added unlabelled Permeate to its milk, a ‘snot-like byproduct’ used to extend milk and standardise its protein content. It has high lactose and B vitamin content but is low in protein. Its use is not permitted within the EC and the USA.


You may also be interested in

Web China: New Zealand milk scare pinches Chinese consumers

“BEIJING, Jan 26, 2013 (Xinhua via COMTEX) — Chinese consumers are expressing concerns about the safety of New Zealand’s dairy products since its government officials disclosed on Thursday that a toxic substance has been found.
New Zealand’s Ministry of Primary Industries claimed that “very low levels” of Dicyandiamide (DCD), which has been found by dairy giant Fonterra Cooperative Group in a random sampling last September, does not pose a food safety risk to consumers.”

Taiwan wants NZ milk scare answers – The China Post

Fonterra, Government Working to Quell New Zealand Milk Scare Bloomberg

DCD related items at independent news service, including

Trials show benefits of Nitrification Inhibitors across NZ – Three year trial of DCD ends February 2012

“The trial has reinforced the opportunity that nitrification inhibitors like DCD offer pastoral farming. But it is important to understand how this will work in local areas, and to achieve best practice in their application we recommend farmers should use informed advice by trained representatives, including the use of Overseer to optimise their use.”

NZ Farmers Plan To ‘Factory Farm’ Dairy Cows

Greenpeace Not “Anti – Farming”, PKE Feed Is

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One thought on “WSJ Blows the Lid on Fonterra Tainted Milk Scandal, NZ Government Knew Months Ago – updated

  1. The whole country is disgusting in this way. This disgraceful, unprofessional third-world standard of food and health safety permeates throughout ALL of New Zealand life. Every institution, every law, every industry, every company, and without exception, every single person acts and thinks in this way. This is a nation arrogant and thin-skinned beyond all belief. Even now, they’ll be shouting that the rest of the world is wrong and that they are right concerning this lethal poisoning of food they send for export. Disgusting really is the word to describe them.

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