29 Aug 2013

Brief Fonterra trading halt after botulism false alarm

7:05 am on 29 August 2013

Fonterra caused some consternation when it halted trading in its share market-listed securities on Wednesday and then almost immediately lifted the halt.

The dairy giant released a statement on Wednesday afternoon saying it was seeking urgent clarification from the Ministry for Primary Industries on its results from the additional testing undertaken following the botulism scare earlier this month.

Fonterra said there was growing domestic and international speculation that the tests were negative for the botulism-producing bacteria but that it had been asking for clarification for the last three days.

Within the hour the ministry released its findings confirming that, indeed, Fonterra's product wasn't infected with the bacteria that can cause botulism.

After the market closed, Fonterra held a conference saying it was relieved by the findings.

Trading in the Fonterra Shareholders' Fund resumed on the Australian Securities Exchange on Wednesday afternoon and will resume on the NZX when it opens on Thursday morning.

Fonterra chief executive Theo Spierings said information had been leaking for about four or five days.

He said Fonterra was getting an increasing number of questions from its key multinational customers and other authorities asking Fonterra to comment on strong indications that the test was a false positive.

"The rumours were getting stronger and stronger and we are a listed company and at a certain point in time we have to disclose what we do know and what we do not know."

After asking for information for three days and following discussion with the Fonterra board and disclosure committee, Mr Spierings said the company decided it had to make a public statement, which could lead to a trading halt.