Orders overnight from China for New Zealand infant formula have dropped significantly in the wake of a contamination threat.
Police revealed yesterday they had spent more than three months investigating a threat to poison infant and other milk formula with the poison unless 1080 drops stopped by the end of March.
Fonterra and Federated Farmers were each sent a letter in November containing the blackmail threat and powder. It tested positive for concentrated forms of 1080. No further correspondence has been received.
New Zealand Infant Formula Exporters Association spokesperson Christopher Claridge this morning said reductions in orders for some exporters of infant formula to the China market had been significant.
"They are in line with what's happened during the DCD event and the botulism event in which case orders were reduced by upwards of 75 percent or they were completely cancelled.
"That's pretty standard after an event of this case because distributors in China and the retail distribution network start to lose confidence in the New Zealand brand."
He expected it to take up to a year for the market to return to normal.
"The distributors don't want to be exposed to the risk, or the potential risk, of carrying too much New Zealand inventory or New Zealand-branded infant formulas," said Mr Claridge.
The 1080 threat is the third food safety or contamination alert that the dairy industry and MPI have had to deal with in as many years.
At the beginning of 2013, they announced the withdrawal of nitrification inhibitors used by some farmers after residues of the active ingredient DCD were found in some Fonterra milk products. The residues posed no human health threat, but despite that, Sri Lanka banned New Zealand milk powder imports for a time.
Then later in 2013, came the botulism false alarm, when Fonterra was forced to recall of infant formulas and other products containing whey protein concentrate.
Waikato University professor of agribusiness Jacqueline Rowarth describes the threat to poison infant formula as economic terrorism.
Dr Rowarth said there should be huge consequences for the person who made the threat, to make sure there are no copycat actions.
She told Nine to Noon the Government had handled the situation well, and she backed the move by officials to not reveal the threat until after testing had cleared products.
"The three-month interim between when Federated Farmers and the milk companies knew about it, and MPI, we've ensured, we've bolted down every single thing. But mostly it's been through testing because our actual supply chain is really secure."