Fonterra issued a voluntary recall of 8,700 bottles of fresh cream sold in New Zealand after tests found possible E.Coli contamination. This recall comes quickly on the heels of the recall Fonterra had to issue last year for its whey concentrate powder over the possibility it was contaminated with a bacterium that causes botulism. The incident badly damaged consumer’s trust in Fonterra, especially in the sensitive and important Asian markets. Danone has announced last week that it has dropped Fonterra as a supplier and plans to take legal action against the company to recoup losses. The Chinese baby formula market is worth NZ$2.7 billion to New Zealand who’s economy relies heavily upon its dairy industry. After a number of high profile food safety scandals, the worst being the 2008 melamine contamination which resulted in the death of six babies, reputation for safety is paramount in Asia. Although this is a relatively small recall and spokespeople for Fonterra point out that this recall shows that the company’s safety systems work, the timing of the incident is less than ideal and might add another dent to Fonterra’s tarnished reputation.
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