China milk scare 'needs big PR drive'

Michael Barnett said the Government was yet to realise how much work is required to restore this country's reputation.

Exporters losing millions because false alarm message hasn't been disseminated.

Exporters say many Chinese consumers remain unaware that Fonterra's botulism scare was a false alarm and a hard-hitting public relations campaign is needed to get that message across.

Local companies are losing up to $2 million in sales in China each week as a result of the dairy co-op's contamination fiasco, which erupted last month after Fonterra whey protein was wrongly suspected of being contaminated with a botulism-causing bacterium, the New Zealand Infant Formula Exporters Association says.

Association chairman Michael Barnett said the Government was yet to realise how much work was required to restore this country's reputation for safe dairy products in the world's second-biggest economy.

Barnett is leading a delegation of local infant formula exporters that left for Shanghai at the weekend to meet with Chinese distributors, retailers and media with the aim of repairing that reputation.

Simon Page, managing director of Auckland's BioPure Health, which operates a network of New Zealand Milk Bar retail outlets in China's Sichuan province, said the number of people visiting its stores had halved since the Fonterra scare.

Speaking from the provincial capital of Chengdu, Page said everyone he had spoken to since arriving in China last month had heard about the potential botulism contamination, but many Chinese consumers were unaware it had been a false alarm.

"It seems the false alarm news only got the briefest of mentions across Chinese media," he said.

New Zealand First leader Winston Peters questioned Prime Minister John Key's decision to travel to the United Kingdom, where he discussed a potential free trade deal with the European Union with British Prime Minister David Cameron last week.

Key and his family then spent the weekend with the Queen at her summer retreat in Balmoral, Scotland.

"Over the past few weeks our reputation in China has slumped but rather than spending time in China, restoring New Zealand's reputation and helping the dairy industry, he would rather go for a photo op with the royal family," Peters said.

A spokeswoman for Key said the Prime Minister would travel to China once the various reviews into the Fonterra scare were completed.

Asked for a response on Peters' comments, she said: "Look I'm not getting into that with you. If you want that level of detail you can send me an email."

Barnett said the exporters' delegation had a video recording of Key to use during presentations in Shanghai.

The Prime Minister would need to visit China "at some point" to address the contamination scare but there was no problem with other ministers and business leaders visiting the country in the meantime, he added.

One Auckland-based infant formula exporter, who didn't want to be named, said he was expecting to lose at least $10 million worth of sales in China in the first year following the contamination scare.