Fonterra scare puts New Zealand under scrutiny

WELLINGTON -- The New Zealand government will act on recommendations made by inquiries to the Fonterra botulism scare, but it will not rush to conclusions about what went wrong, Trade Minister Tim Groser said Wednesday.

And while New Zealand's relationship with China remained strong after the scare, officials in China and other Asian countries were closely watching the New Zealand government's response, he said in a published speech to the Wellington Chamber of Commerce.

Groser was speaking the same day that the Ministry for Primary Industries was expected to publish a report on how Fonterra produced and sold at home and abroad whey protein concentrate that had been contaminated with a bacterium that can cause botulism.

"There will be a range of inquiries yet to come of which we expect the ministerial inquiry will be the most authoritative. Actions will flow from these reports, to be sure. But let's wait and see precisely what happened, what went wrong and why before rushing to conclusions about what those actions should be. If not, you might end up 'fixing' the wrong problem," Groser said.

"With respect to the all-important relationship with China, we are in a good position. The New Zealand-China relationship remains in very good shape," he said.

"But the questions their ministers have are exactly the questions New Zealand ministers have. The purpose of the ministerial inquiry is to find the answers to those common questions."

New Zealand's reputation had suffered some damage in the market place and the government was developing a strategy to deal with the resulting problems inflicted on smaller New Zealand businesses, he said.

A range of discussions were underway -- technical, political and commercial -- to address related aspects of the country's trading problems, including the export certification mistakes that saw New Zealand meat sitting on Chinese wharves earlier this year.

"I have said on many an occasion that the least we can expect, metaphorically speaking, is a bloody nose. But frankly, while I know it will take a lot of further hard work and some recalibration here and there, I am optimistic we will indeed recover from this and fully," he said.