12 Sep 2013

Travel fund for firms impacted by Fonterra scare

9:53 am on 12 September 2013

The Government has announced it is establishing a $2 million fund to help small companies travel overseas to reassure their trading partners affected by Fonterra's botulism scare.

Fonterra's milk powder products were blocked at the borders of a number of countries last month, after the dairy company announced the product may have traces of a bacteria that can cause botulism.

That was later found not to be case.

Trade Minister Tim Groser says the fund will mostly be used to facilitate face-to-face contact with businesses.

Grants of $20,000 per company will be made as long as there are matching funds from the business owner.

Mr Groser guessed about 25 to 30 businesses, with turnover of under $500,000 a year, might take up the offer.

He says the money will help firms make face to face contact with international customers across Asia and Russia.

The fund is modelled on one set up for Christchurch businesses after the earthquake when nearly 250 companies sought financial assistance.

Mr Groser says the fund is not intended for larger companies.

"I think it will be helpful to those people who've been caught up in this mess, they didn't make the problem and they've got to re-establish their relationships with their processors, their retailers and their distributors."

Mr Groser says some of the grant recipients will become significant companies and the Government does not want to see them fall over at the first slip.

He says Prime Minister John Key will travel to China in early November, likely accompanied by Food Safety Minister Nikki Kaye.