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 New Zealand police said on Tuesday letters were sent to the national
farmers' group and dairy giant Fonterra in November accompanied by
packages of infant formula laced with 1080, demanding that use of
the toxic pesticide be stopped by the end of March.
The announcement pushed the New Zealand dollar to a six-week low
over concerns about the possible impact on the country, which
depends on dairy products for about a quarter of its export
earnings.
Trading in New Zealand's dairy companies and futures was halted for
a while following the second milk-safety scare to hit the country
over a two-year period.
Police said no traces of the poison resembling salt crystals were
found in any products in factories. The Ministry of Primary
Industries (MPI) also sought to assure consumers, saying the chances
of contamination were extremely low.
"We are confident that New Zealand infant and other formula is just
as safe today as it was before this threat was made. People should
keep using it as they always have," said MPI Deputy Director-General
Scott Gallacher.
Security of production facilities and the supply chain had been
increased, the police said.
"Whilst there is a possibility that this threat is a hoax, we must
treat the threat seriously and a priority investigation is
underway," said Police Deputy Commissioner Mike Clement in a
statement.
He said no further letters had been received after the initial batch
and the matter was being treated as blackmail rather than terrorism.
Fonterra, which controls nearly 90 percent of the country's milk
supply and collected roughly 14 billion liters of the liquid last
year, said in-house tests conducted since January had not found any
traces of the poison in its dairy products including infant formula
powder.
"We can fully assure our customers and consumers that all of our
milk and products are safe and of high quality, and our supply chain
continues to be secure and world-class," Fonterra CEO Theo Spierings
said in a statement.
"We have taken immediate and decisive steps to give our customers
and consumers added confidence - including increased testing and
security measures."
UNINTENDED IMPACT
The poison 1080 is extremely toxic and is used extensively in New
Zealand, including in national parks and around the Milford Sound,
one of the country's biggest tourism draws, to control pests such as
stoats, rabbits, deer, rats and possums.
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While these non-native species cause damage to the native flora and
fauna, conservation groups have long criticized the use of 1080
because of the unintended impact on native wildlife, and there have
been occasional protests against its use and unsuccessful campaigns
to have it banned.
The latest threat to the country's dairy industry, which exported
$11 billion in milk products in 2014, follows a contamination scare
in 2013, when a botulism-causing bacteria was believed to be found
in one of Fonterra's products.
The incident prompted a recall of infant formula, sports drinks and
other products in China, its biggest buyer, and other countries
before the discovery was discovered to be false.
Dairy products make up more than 7 percent of New Zealand's gross
domestic product.
The New Zealand dollar fell on Tuesday to as low as $0.7278, its
weakest since early February, following the announcement, and
analysts were bracing for any economic fallout from the incident.
"It's just a threat and at this stage it hasn't been carried out,"
ANZ agricultural economist Con Williams said.
"It's really the reputational issue given the sensitivity about food
safety issues, and those things are impossible to quantify."
($1 = 1.3706 New Zealand dollars)
(Editing by Muralikumar Anantharaman)
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