Clostridium Botulinum found in 3 batches of whey protein concentrate which is used in infant formula, growing up milk powder and sports drinks

Clostridium Botulinum found in 3 batches of whey protein concentrate which is used in infant formula, growing up milk powder and sports drinks

Content supplied by Fonterra

Fonterra today advised eight of its customers of a quality issue involving three batches of a particular type of whey protein concentrate (WPC80) produced at a single New Zealand manufacturing site in May 2012.

As a result, these customers are urgently investigating whether any of the affected product, which contains a strain of Clostridium, is in their supply chains. If need be, they will initiate consumer product recalls.

There have been no reports of any illness linked to consumption of the affected whey protein. Dairy products such as fresh milk, yoghurt, cheese, spreads and UHT milk products are not affected.

Fonterra Chief Executive Theo Spierings today said: “Food safety is Fonterra’s number one priority. We take matters of public health extremely seriously and we are doing everything we can to assist our customers in ensuring any product containing this ingredient is removed from the marketplace and that the public is made aware.

“We are acting quickly. Our focus is to get information out about potentially affected product as fast as possible so that it can be taken off supermarket shelves and, where it has already been purchased, can be returned,” Mr Spierings said.

“We are working closely with New Zealand’s regulatory authority – the Ministry for Primary Industries – to keep New Zealand and offshore regulators informed.”

Fonterra initially identified a potential quality issue in March this year, when a product tested positive for Clostridium. There are hundreds of different strains of Clostridium, the majority of which are harmless. 

Product samples were put through intensive testing over the following months.  On Wednesday 31 July 2013, tests indicated the potential presence of a strain of Clostridium (Clostridium Botulinum) in a sample, which can cause botulism. 

The particular whey protein concentrate concerned (WPC80) is used by Fonterra’s customers in a range of products including infant formula, growing up milk powder and sports drinks, said Gary Romano, Managing Director NZ Milk Products.

“For this reason, we immediately contacted our customers and the appropriate authorities, so that any potentially affected product could be removed from the marketplace.

“We are working with our customers and will provide more information and updates as they become available,” Mr Romano said.

Any consumer product recalls that may need to take place will be initiated by the respective food companies.

Additional update:

Fonterra today confirmed that no Fonterra-branded consumer products are affected by the quality issue announced by the Co-operative on 3 August 2013.

Fonterra assured consumers in global markets including Australia, Asia, China, Latin America, New Zealand and the Middle East that none of its range of branded consumer products contains the affected whey protein concentrate (WPC80).

Full list of Fonterra’s consumer brands

In addition to branded consumer products, Fonterra markets a range of commercial ingredients under its NZMP label. These ingredients are sold to other food companies that use them to manufacture their own consumer products.

The three specific batches of WPC80 produced at a single New Zealand manufacturing site, which were identified by Fonterra in its initial announcement, are the only NZMP ingredients affected by this quality issue.

These batches were sold to eight of Fonterra’s customers – with some receiving it as base product and others receiving finished product manufactured by Fonterra using the affected WPC80 as an ingredient. Of these customers, three are food companies, two are beverage companies and three are companies that manufacture animal stock feed.

Fonterra is continuing to communicate with and provide support directly to these eight customers. At this stage, no product recalls have been announced. Any product recalls that may be necessary in the coming days will be announced and initiated by the respective customers, in conjunction with local regulators.

Fonterra will continue to provide regular updates and further information as it becomes available. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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44 Comments

"My kingdom for a horse."
 

information flows aside.
Fonterra chief executive Theo Spierings is heading from Europe to China this weekend for meetings with manufacturers who have used contaminated whey powder supplied by the New Zealand dairy giant for use in infant formula and other products.
The dairy cooperative is in crisis communications mode as it seeks to do the right thing by notifying that eight unnamed customers have received batches of a whey protein concentrate containing a "virulent" strain of a commonly occurring bacteria, clostridium, linked to the potentially fatal disease, botulism.
http://nz.finance.yahoo.com/news/fonterra-chief-heads-china-amid-2335008...
 

When to disclose
http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&allinfo=&as...
refer the dates mentioned
 
Fonterra first became aware of the potential contamination in March of this year, 10 months after the dried product was manufactured, and subsequent testing revealed on July 31 the presence of Clostridium Botulinum. The bacteria take hundreds of variant forms with affects on milk products ranging from nothing through to food-spoiling and health risks.
 

The 2013 sesson payout as well as that for 2014.
 
The question also arises of whether anyone should have trusted Fonterra's $7.82 forecast payout in the first place.

Rate hike anyone?

A further and possibly severe unwind of the recent NZD/AUD gains translating into downward dislocation of the primary NZD/USD currency indicator may just precipitate such an outcome - foreign wholesale lenders may reevaluate their comittment and demand a credit risk premium hike, as the cost of continuing business.

I love reading your posts Stephen, always good value. Crikey they can take a bit to get ones head around sometimes though.

Thank you very much Belle.

Quite right Stephen.
Interesting chart period for FSF. Volume also speaks its own name.
Welcome to the Sharemarket all you Redband shod folks. Do you like it?

It seems a downward  magnitude adjustment has been made to the volume traded calculation that persisted over the weekend.

We're exporting botulism to the world ! ....... maybe the former prime minister was wrong after all , and the commerce commission right , that it's dangerous for the nation's dairy industry to be so dominated by one major player , Fonterrible ....
 
.... poisoned baby formula , again ........ oh dear !

maybe the former prime minister was wrong after all , and the commerce commission right
 
You are on to it GBH.

Managing the news .. after close of markets Friday 2 August 2013
Mr Spierings said .. we are acting quickly .. as fast as possible ..

Manufactured in May 2012 at a single New Zealand site
 
Fonterra first became aware of the potential contamination in March 2013 of this year, 10 months after the dried product was manufactured, and subsequent testing revealed on 31 July 2013 the presence of Clostridium Botulinum
 
Mr Spierings, at this very moment, is winging his way to China
 
Press Conference 3rd August 2013
 
We can confidently state that only 35 tonnes were affected .. Mrs Scruggs the factory cleaner has produced work sheets for May of 2012 showing the contaminated pipe was thoroughly cleaned, passing the pipe through her portable autoclave because she could see all those little botulisms crawling in and out of the pipe .. Mrs Scruggs has a Phd in cleaning pipes containing botulisms .. we have every confidence that Mrs Scruggs caught it in time .. preventing any further contamination

Under the continuous notification rules, announcements will be released to the ASX and NZX on Monday 5 August 2013

and from others looking in:
http://www.bloomberg.com/news/2013-08-03/china-asks-importers-to-recall-...

China’s General Administration of Quality Supervision Inspection and Quarantine in a statement yesterday said local agencies should step up inspections of milk products from New Zealand. Fonterra said Chief Executive Officer Theo Spierings, who is visiting China for scheduled meetings, will speak with customers there.
 
http://www.ibtimes.co.uk/articles/496512/20130803/nwe-zealand-fonterra-m...
Repeated Issues
This is the second dairy contamination case this year to involve New Zealand's largest company.
At the beginning of this year Fonterra warned that it had found traces of dicyandiamde, also called DCD, a potentially toxic chemical used in fertilisers, in some of its milk powder. Although it was found late last year, the reports emerged only this January.
The development comes in the wake of Fonterra's plan to launch its own branded milk formula in China. Theo Spierings, chief executive officer of Fonterra, is travelling to China in a bid to finalise a deal.
 
http://www.chinadaily.com.cn/china/2013-08/03/content_16868611.htm
BEIJING -- China's top quality watchdog said late Friday that Chinese importers purchasing dairy products from New Zealand company Fonterra should immediately initiate recalls of potentially contaminated products, according to a press release on its website on Saturday.
Fonterra said Friday that some whey protein produced in May 2012 was found with clostridium botulinum, which can cause botulism.
China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has demanded the New Zealand side to act immediately to prevent the tainted products from harming the health of Chinese consumers.
 
Theo is facig a massive task, it goes to the heart of all/many things, no wonder Tuesday was a full day. Hopefully he stays put, though some action org related will need be demonstrated.
 

Theo is facig a massive task, it goes to the heart of all/many things
 
This is way bigger than Theo has control of, and includes:

  • Massive cultural changes required within Fonterra
  • A need for a clean out of MPI incompetence
  • John Key's 'surplus' and re-election prospects
  • Losses to major financial institutions
  • Confidence in our economy

 
All co-operating of course to perception manage the issue for the good of NZ.

Cock up, big time
 
 So while the DCD scandel was running they were sitting on this. Must be some seriously pissed processors who have been using Fonterra product, court cases coming up.
Then doubt about source
 
Steve Flint, associate professor in food microbiology at Massey University's Institute of Food, Nutrition and Human Health, said Clostridium botulinum was rare in this country and difficult to isolate.
For the organism to contaminate a whey protein concentrate would be extremely unlikely, he said.
"The problem if it were in a can and growing to high numbers it produces a toxin, and once it's grown and produced a toxin, then unfortunately that would be toxic and it would be a risk," Flint said
But he noted that while botulism was probably the most serious form of food poisoning, it was rare around the globe.
The source of the contamination - which Fonterra said was a little used piece of pipework that was not as sanitary as it should be - was something he had not heard of before as a source for the organism at a dairy plant.
"You would normally get aerobic bacteria growing, that would grow in virtually any environment exposed to air, but these things, because of the strict requirement for environments with no oxygen it's very unusual."
 
PR and spin only goes so far.

Consider carefully Stephen Hulme's post "the horse has bolted" upthread (#2)
Yes, the knowledge of this episode has been known for some time
It has been contained - effectively
As from Monday morning, when the doors open, the investigative divisions of ASX and NZX should be trawling through all large "sales" of Fonterra shares from March 2013 through 2 August 2013 looking for any unusual sized transactions by anyone with inside connections within Fonterra.

The regulators may also need to investigate those seeking precautionary diversity within the share register of Synlait Milk Limited, last Friday.

Fonterra's unit price is likely to take a hit, as will the New Zealand dollar, this morning as markets come to terms with the latest food contamination scare to come from the cooperative dairy giant, market sources said.
http://www.odt.co.nz/news/business/267388/fonterra-likely-take-market-hit
 
Trade Minister Tim Groser said China has introduced a blanket ban on all New Zealand milk powder imports in response to the news.
 
Bank of New Zealand currency strategist Mike Jones said the New Zealand dollar had started to weaken on Friday as the news filtered out to foreign exchange markets, but he expected the currency to fall by a further half to one US cent when trading resumes today.
 
MJ might be screaning calls come first thing Monday.
 

For the record
FSF units down nearly10% in the early running

It gets worse
As of tommorrow morning the share price of Fonterra will potentially look sick
Any purchaser of Fonterra shares between March and Aug will be feeling pain
During that period Fonterra has been issuing positively gushing reports
While at the same time witholding the bad news
Some purchasers may well be consulting with Andrew "class action" Hooker

Indeed, it does appear to still be getting worse.
 
Russia has made one of the most extreme responses to Fonterra's contamination scare so far, banning all goods made by the New Zealand dairy giant, according to media reports:
 
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1090...

It surprises me that France wasn't first cab off the rank to have all our dairy products ( cheese and butter included ) immediately banned from the entire EU .....
 
.... any excuse to have us shot out of their cosy subsidized-farmers utopia .... and Fonterrible oblige by handing them the ammo , once again ..

"But he noted that while botulism was probably the most serious form of food poisoning, it was rare around the globe."
This is a very oddly qualified sentence. While it is rare around the globe, what is being discussed is that it has actually been in Fonterra products. All that I can construe this to mean is that you are not at all likely to get botulism from non-Fonterra products.

I am likely getting out of my depth here, but I understand Fonterra injects nitrogen into its powder bags before sealing them.
 
Nitrogen presumbably restricts the growth of aerobic bacteria during storage.
 
Botulism though requires anaerobic conditions to thrive, so any botulism bacteria present thank Fonterra for filling the powder bag with nitrogen and then storing it for more than a year.

Colin I have a reli working in Fonterra and for the last few years he has been a broken record claiming Fonterra were going to take a big fall. From cleanliness to health and safety to plant maintenance. All has been on a downward slide. This from a 20 year veteran employee. His analysis is that they are pinching pennies in many of the wrong places. Refusing to spend on obvious things. It must be very difficult to manage such a large food business and achieve the  quality required. I imagine this wont be the last issue. I gather their will be a search for extra warehousing as of monday morning.

Got to keep the payout to the farmer up. Thats what matters to National.
 
 Smacks of  cutting back capital expenditure, and I suppose the growth down south has been huge.
 Now we may get to see what they are made of, so far not looking good.
 
  Went to a meeting last week on our new irrigation scheme. The  Reg council got up and told us no caps on Nutrients budgets, shit be nice if he told the same story to the rest of the electorate, I have to decide when he's telling the truth and when its bullshit.

bullshit?
 
Don't you mean 'when the bastards are lying to you'?

when their lips are moving

Have you had rain down your way Andrew? Getting dry here. Bowt 40 mls in the last 6 weeks.

Easterly as Im typing, getting wet again. You should think about moving down. Im growing grass, the bulls have started ignoring the hay.

Would love to. Over the winters on the plateau.

‘‘frank and constructive’’ 
http://www.stuff.co.nz/business/farming/dairy/9000131/Fonterra-at-the-ce...
LOL, I bet.
"frank" We are going to send you to china, they want to prosecute you. "constructive" you'll become body parts for the chinese, its how they recover the costs of your execution.
regards 

Surely Fonterra should know by now that all Production & Distribution needs to be owned and managed end to end by NZ Fonterra companies & branches to keep safe food.
Maybe start diversifying into countries that will allow complete supply-chain control end to end.
Obviously we now need the GCSB to keep a close monitor on all Fonterra communications/emails/phone calls/network traffic so that NZ-ers can be assured that their business is above board.   How many of these "emergencies" does Fonterra plan to have every year?
 

a 'black swan' event for nz?

Another black swann event or more accurately a known unknown risk would be a Foot and Mouth outbreak. That really would be the nail in the coffin for New Zealand.
 
MIA you are so right about New Zealand being overly reliant on a undiversified economy made up of monopolies and crony capitalists.

this crisis neatly sums up nz's problems.A Small undiversified economy,dominated by monopolies or near monopolies,and a crony culture.

I work in the Dairy industry (local liquid products) and would be careful about blanket statements about quality and testing not being up to snuff.
Remember the employees are proud of the products produced and consume them. In my experience quality and safety are always paramount.
While I cannot comment on this situation we need to be careful of jumping to conclusions.
 

Remember the employees are proud of the products produced and consume them. In my experience quality and safety are always paramount.
 
Nobody would claim otherwise. Equally, they generally have little input to the management approach exercised at head office. Extraneous forces bring much to the table when executive decisions are discussed and thereafter executed.

And the last 24 months head office/board has been full of TAF related and domestic market regs, distractions.
Operationally this is poor, process and procedures level - we thought the computer (JDE?) had a ops process/clean/maintenance module (can any confirm?) ...
 
Financially while the initial miss-pricing/underpricing of units offers investors some relief (that is now last financial year - done and booked), the missing of FYE earnings ex prospectus, DCD and now this will mark this the current CALyr as unhappy.
 
Opertionally, life goes on - Nestle and African milk biscuits - but a hit like this usually see current management exited, or current board give up control....
makes what happens next more than interesting.
 
We would still like to see the science, the mechanics of the pipe in process, and the testing/results procedures.
 

Whey too much is getting made of this - Fonterror needs to keep its powder dry until their boss gets to Bay Jing and tells tthe chinamen that walking thru all their smog is way more lethal than a few bugs that may be in our cans !