Consumers losing confidence in Fonterra

In January, New Zealand's Ministry for Primary Industries found DCD in some of Fonterra's milk powder products and later discovered it came from fertilizers used in pastures, although the source of the contamination is still to be revealed.

China has halted imports of whey protein powder and whey protein concentrate produced by Fonterra in New Zealand since Aug 6 .

Experts are worried the ban will create a temporary shortage of raw ingredients for domestic dairy businesses that rely on Fonterra.

"It's not easy for businesses to find replacement suppliers within a short time. They need to consider costs, quality of the ingredients and foreign exchange rates. Dairy products from the European Union take at least three months to enter China," said Wang Dingmian.

China imported 371,000 metric tons of raw milk powder from New Zealand in the first half of this year, accounting for approximately 83 percent of the country's total milk powder imports, according to the General Administration of Customs.

Mengniu Dairy Group, the country's dairy giant, as well as Chenguan Dairy Industry Co and Shanghai Howell Nutritional Dairy -two businesses specializing in baby formula production-said on Monday none of the prohibited ingredients made it into their products.

But Ye Xinping, deputy general manager of Shanghai Howell Nutritional Dairy, said, "The ban will certainly affect those who receive Fonterra's raw materials."

As a result of the Fonterra scares, sales in China of infant formula produced in Europe have grown recently. Statistics from Taobao, China's leading online shopping site, showed a 220 percent rise in transaction records for baby formula from the Netherlands and Germany over the past seven days.