14 Oct 2015

Industry counts cost of 1080 threat

9:01 am on 14 October 2015

The 1080 infant formula threat cost New Zealand's dairy sector millions of dollars in loss of reputation, an industry body says.

Milk formula being tested

More than 150,000 tests across a range of products have been carried out since the threats were made in November 2014. Photo: SUPPLED

That is the opinion of the Dairy Companies Association of New Zealand, following the arrest of a 60-year old businessman who was yesterday charged with attempted blackmail for financial gain.

The charges relate to a threat late last year to contaminate infant milk formula with 1080.

Dairy products are New Zealand's biggest export earner with $14 billion's worth leaving the country's shores each year, and the industry says reputation is everything.

Dairy Companies Association of New Zealand chairman Malcolm Bailey said the threat cost the country millions of dollars.

"It incurred tens of millions of dollars in costs to try and protect our markets, and I believe we successfully did that.

"But we had to put a lot of effort into reassuring not only people in New Zealand but people offshore in our key markets there that we were doing everything possible to make sure that this threat wasn't carried out," he said.

Those major export markets include China, the United States, Japan, the European Union, Malaysia, Australia, Philippines, Taiwan, Singapore, Belgium, Venezuela and Saudi Arabia.

Mr Bailey said going public with the threat was the right thing to do.

"There are arguments that you should not go public with them because a lot of them are deemed to not have credibility.

"But nevertheless I think with hindsight it was the right thing to do, and underscored just how transparent we are in New Zealand and how open we are and prepared we are to stand up and be counted in guaranteeing our commitment to food safety."

(L-R) Martyn Dunne (MPI), Police Commissioner Mike Bush, Detective Superintendent Andy Lovelock.

Left to right: Ministry of Primary Industries (MPI) CEO Martyn Dunne, Police Commissioner Mike Bush and Detective Superintendent Andy Lovelock at yesterday's press conference about the arrest. Photo: Radio NZ / Lauren Baker

Retired professor John Birkbeck used to be an adviser to the New Zealand Infant Formula Marketers' Association.

He said, while a man had been arrested, the money spent on reputation control was lost forever.

"Unfortunately you're always vulnerable and there isn't any way to avoid it," he said.

"You can't recover the costs because even if the courts pursued this businessman for all he's worth - and the courts rarely do that - but, even if they did, you're not going to get anything like the amount of money that's been wasted on the investigation."

The police said they believed the accused man, who has interim name suppression, acted alone.

The total cost of the investigation, known as Operation Concord, is over $3 million so far.

The man will next appear in court on 28 October.

MPI sees no international disruption

The Ministry of Primary Industries (MPI) is adamant the 1080 infant formula threat has not caused any disruption to trade with international markets.

Deputy director general, Scott Gallacher told Morning Report the threat had cost money, but the Ministry had not detected any disruption to overseas markets.

"For this criminal blackmail threat we did not detect any disruption to New Zealand's trade into overseas markets, because if anything our discussions with overseas markets highlighted the view of New Zealand as a strong, safe producer.

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