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China is warning consumers about milk imported from New Zealand dairy giant Fonterra.
New Zealand dairy giant Fonterra has issued an apology over milk products that were tainted with bacteria that can cause botulism.
"We deeply apologize to the people who have been affected," CEO Theo Spierings told a news conference in China where the product was recalled.
Spierings firmly denied an accusation from New Zealand Prime Minister John Key that Fonterra delayed releasing information about the contamination.
The company informed customers and the authorities within 24 hours of confirming the problem, Spierings said.
Fonterra admitted that three batches of a whey product — the key dairy product in infant formulas — had been contaminated with bacteria that causes botulism.
The batches were produced in May 2012, but the contamination was not detected until last week.
New Zealand is the world's largest dairy exporter and the contamination scare is a potential blow to the economy.
The country markets its milk as a "clean, green" alternative to Chinese milk, particularly in the lucrative infant formula market.
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Quality inspectors in Shanghai have called on New Zealand authorities to "take effective measures" to ensure the safety of dairy products exported to China following the scare.
About 95 percent of China's milk powder imports in January-March came from New Zealand, up by a third on the same period in 2012, reports Agence France-Presse.
The demand for foreign supplies of baby formula has surged since 2008 when milk tainted with the chemical melamine left six children dead and more than 300,000 sick.
Russian media reported that Moscow was also "recalling Fonterra's products, including infant formula and advised Russian consumers not to buy the company's other products."
Spierings said Monday that China will lift restrictions on Fonterra's products as soon as the company provides more information, but the bans could still impact the New Zealand economy.
"It’s not good," Stephen Toplis, head of research at Bank of New Zealand in Wellington, told Bloomberg.
"It’s reputational risk more than anything, and that will be determined by what happens over the coming weeks in terms of how the company responds."