New Zealand dairy giant Fonterra today told its 755
employees in Sri Lanka to go home as a security measure after
protests over food safety took place outside its office near
Media reports from Sri Lanka, where Fonterra employs mostly
Sri Lankan nationals and six New Zealanders, said a
government-allied group protested outside the office
demanding that the company respect a court order and withdraw
what it said was contaminated milk products from the market.
The Sri Lankan government wants to increase domestic dairy
production and reduce the country's reliance on dairy
Farmers, many of whom own dairy cows, are President Mahinda
Rajapaksa's main voter base, international news agency
The agency said more than 100 members of the National Freedom
Front, a nationalist political party in Rajapaksa's ruling
coalition, had protested at Fonterra Brand Lanka's head
office, 30km north of Colombo.
Fonterra and Sri Lankan authorities have been engaged in a
war of words over the last few weeks over the safety of some
of the cooperative's products.
Earlier this week, Fonterra said it had received notification
of a temporary injunction to prevent it selling its products
in Sri Lanka.
The cooperative has refuted allegations that its products
contained agricultural chemical dicyandiamide, or DCD. The
whey protein concentrate products that were the subject of a
product recall earlier this month had not been sent to Sri
In today's statement, chief executive Theo Spierings said
Fonterra had suspended its operations in Sri Lanka as a
precautionary measure because the situation there had become
He said in a statement that Fonterra had two priorities,
protecting its people and protecting its farmer shareholders'
"The temporary suspension is the right thing to do," he said
in a statement. "It is a precautionary measure to ensure our
755 people working there are safe," he said. "We have closed
our plants and office in Sri Lanka, and have asked our people
to stay at home."
In today's statement, Spierings said Fonterra had provided
assurances to the Sri Lankan authorities about the safety and
quality of Fonterra's products.
"Recent events, however, have made it difficult to maintain
day-to-day operations, and we need to get them resolved," he
Fonterra is the subject of an "enjoining order" which has
shut down its ability to sell product, advertise it or make
public statements in any way with customers or consumers in
"We are also working with Sri Lankan and New Zealand
government authorities on a long-term sustainable solution
for our Sri Lankan customers, communities and dairy sector,"
New Zealand has had a presence in the Sri Lankan dairy market
for 35 years and is a significant player in the local market,
taking supplies from 4000 local farmers.
Economic Development Minister Steven Joyce declined to be
drawn on whether the protests were politically motivated, but
said there had been discussion in Sri Lanka about the
development of its dairy industry.
"Obviously there are serious issues that need to be worked
through with the Sri Lankan government and we are helping
with that," Joyce told reporters at Parliament.
The country buys about $260 million, or 2 per cent of New
Zealand's dairy exports, a year.