$2m to fix botulism scare damage

Trade Minister Tim Groser says New Zealand is partway through a process of restoring its reputation in the world as a safe food producer. Photo / APN

Minister says support package will help small to medium firms restore confidence in overseas markets

Trade Minister Tim Groser says New Zealand is partway through a process of restoring its reputation in the world as a safe food producer after Fonterra's whey product contamination scare and subsequent product recall last month.

Groser, in announcing a $2 million Government support package yesterday aimed at helping small- to medium-sized companies to restore confidence in their markets abroad, said "things are stabilising and moving in the right direction". "I'm reasonably encouraged by the way that things are evolving," he said.

The situation in China - New Zealand's biggest dairy market - was also encouraging, he said. Officials from the Ministry for Primary Industries are in Beijing at the moment.

Fonterra last month advised that several tonnes of whey product was thought to contain clostridium botulinum, a bacterium that can cause botulism, prompting a widespread product recall.

Further testing revealed the whey protein had been contaminated with clostridium sporogenes, which does not present a food safety risk.

The New Zealand Infant Formula Exporters Association has complained that New Zealand exporters were continuing to lose millions of dollars in Chinese sales as a result of the scare.

Association chairman Michael Barnett said the formation of the fund recognised there was a "commercial imperative" in helping businesses to regain their markets.

"The big thing we don't know is how much damage has been done at the consumer level and how long it's going to take for consumers to look at the New Zealand brand and feel as if they can trust it," Barnett said.

He said the fund was a good start but the Government might need to reinvest in it.

Groser said it was clear the small- to medium-sized companies did "not have the balance sheets" to restore the reputational damage incurred by the scare.

He said the companies were "the meat in the sandwich - caught up in this greater conflagration".

Groser and the Minister for Primary Industries, Nathan Guy, outlined an initial plan to restore New Zealand's reputation in key markets after the incident.

The plan would involve a programme of targeted visits to key markets by Government ministers, as well as senior officials, once essential technical issues were resolved. The visits would be complemented by incoming visits of overseas ministers, regulators and media.

Groser said the fund would help firms contact existing customers and shore-up business relationships affected by the whey protein issue.

The fund was similar in its format to that set up for Canterbury exporters affected by the Christchurch earthquakes. The companies must have a minimum of $500,000 in sales to qualify and the maximum subsidy was set at $20,000 per application.