Fonterra says sorry for 'anxiety'

Beverages produced with the tainted whey protein are safe to drink, Spierings said.

"We've confirmed with the beverage clients that the bacteria cannot survive the heat treatment of the production process. Those companies products are clear," Spierings said.

On Sunday, the nation's top quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China, asked the companies to recall all the products involved.

Wahaha has produced a list of products made with the whey and said they have been almost sold out since October, but that no bacteria have been found in the end products.

Coca-Cola said it produced 19,000 crates of beverage using the contaminated protein on March 5. The drinks were transported to the Guangxi Zhuang autonomous region, and the provinces of Yunnan and Guangdong, but are now being recalled, according to reports on China Central Television.

Spierings said that no cases of illness have been reported so far, and Fonterra has not received any complaints.

China has now halted the import of all milk powder from New Zealand, according to Reuters, which cited New Zealand's trade minister, Tim Groser.

The New Zealand dollar dropped to its lowest level in a year against its US counterpart on Monday. In contrast, Chinese dairy companies reported a rise in their share prices: for example, Royal Dairy Co, based in Guangxi Zhuang autonomous region, surged 7.32 percent and closed at 14.52 yuan ($2.37).

Consumer confidence in foreign-branded formulas has declined sharply in the wake of the news, and some industry professionals say that may provide opportunities for domestic producers to move in on the market.

According to milk industry expert Wang Dingmian, foreign brands hold a share of almost 60 percent of China's baby formula market. In the first half of this year, China imported 445,000 metric tons of raw milk powder, with approximately 80 percent coming from New Zealand. Fonterra supplied 70 percent of the raw milk powder imported from New Zealand over the same period. China is New Zealand's largest trading partner.

Consumers said the incident has attracted wide attention because most of the products involved are stage 2 infant formula, which is in high demand in China.

"Many young mothers in China stop breastfeeding their children when they are around 12 months old and opt for stage 2 baby formulas," said Feng Yanyun, a Shanghai resident who has a 2-year-old son.

Taken off the shelves

Retailers were quick to move to counter the threat. Carrefour China ordered the removal of questionable batches of Dumex infant formulas from the shelves of its more than 100 Chinese mainland stores on Monday.

"Some of the products on the shelves belonged to the 12 batches. They have now been removed," said a spokesman for Carrefour in Shanghai who would only give his surname, Ji.