NZ officials 'blew whistle' on milk scare

New Zealand officials "blew the whistle" on the sale of contaminated milk linked to the death of at least one baby in China, Prime Minister Helen Clark says.

The contaminated milk powder was sold by New Zealand dairy giant Fonterra's Chinese joint venture partner, Sanlu -- raising fears the scandal could taint New Zealand's reputation in the massive market.

Fonterra yesterday revealed it had been aware of the contamination since mid-August, despite a full public recall only being initiated last week.

But Miss Clark today said Fonterra had pushed for a full recall at the earliest possible opportunity but had been blocked by Chinese local government officials.

"They have been trying for weeks to get official recall and the local authorities in China would not do it," she said on TVNZ's Breakfast programme.

Miss Clark said the first she knew about the issue was on September 5. Three days later she convened a meeting of senior ministers at which she ordered officials to leapfrog the local officials and immediately inform their superiors in Beijing.

"As you can imagine when New Zealand Government blew the whistle in Beijing a very heavy hand then descended on the local authorities," she said.

"At a local level...I think the first inclination was to try and put a towel over it and deal with it without an official recall. That is never what we would do in New Zealand."

Miss Clark said she hoped the scandal would not affect Fonterra's reputation, but it showed to the company it could not be "naive" in its foreign operations and had to insist on its own high standards.

"I think Fonterra, from the advice I have had, has behaved responsibly at all times, but it has been dealing in a political system at a local level in China where the inclination is to cover things up, but I have to say once we blew the whistle in Beijing they moved very fast."

The milkpowder poisoned with melamine, an industrial chemical which can boost the apparent protein content in some standard tests on food, is reported to have killed one baby and made another 432 sick with kidney damage.

Trade Minister Phil Goff last night told NZPA other major dairy companies, such as Nestle, had been caught up in similar scandals in the past and it was possible several other companies had also supplied the contaminated milkpowder.

Fonterra has a 43 percent stake in Shijiazhuang Sanlu Group Co Ltd, which ordered a product recall on September 11.

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