China's state-run news agency has delivered a sharp critique of New Zealand in the wake of Fonterra's contamination crisis, describing this country's 100 per cent Pure tourism campaign as a "festering sore" and saying free market ideology resulted in Kiwi homes becoming damp, leaky and uninhabitable.

In an editorial article published on a number of major Chinese news websites overnight, Xinhua says the time has come to ask the New Zealand Government, "Where is the quality control?"

The news agency, regarded as a mouthpiece of China's Government, says this country's food safety problems are not "mere details" - they are beginning to look systemic.

"One could argue the country is hostage to a blinkered devotion to laissez-faire market ideology. Many New Zealanders fell victim to this when the construction industry was deregulated two decades ago resulting in damp and leaky homes that quickly became uninhabitable," Xinhua said.


"While it's true the government isn't responsible for the contamination of Fonterra produce, it should be held accountable for the fact that nothing was done to identify the problem before it was dispatched to export markets and domestic customers."

The article said Federated Farmers president Bruce Wills came the closest to identifying the problems when he said there was a need for government departments, farmers, exporters and educators to better understand customers in export markets.

Xinhua said: "Too often New Zealand's government appears to lay siege to perceived trade barriers, battering bluntly away until the doors swing open. And once open, it's open slather for those who can throw as much produce at the new market as possible."

The news agency goes on to describe John Key's defence of the 100 per cent Pure tourism campaign, when in April the Prime Minister compared it to McDonald's "I'm Loving it" slogan and said it needed to be taken "with a pinch of salt".

"No, Mr Key, it needs to be fixed before your trading partners just stop loving it," Xinhua said.

One infant formula industry source told the Herald that the Chinese Government would capitalise on the Fonterra scare as it worked towards rebuilding its domestic infant formula industry, which was decimated by the 2008 melamine scandal that killed six babies and sickened thousands more.

"They'll be loving it because it just plays into their hands doesn't it? Here they are trying to protect the Chinese infant formula industry and limit New Zealand and this just couldn't have played out better for them."

Fonterra revealed on Saturday that a dirty pipe at its Hautapu plant in the Waikato might have contaminated three batches of a whey protein called WPC80 with bacteria that can cause botulism, a potentially fatal illness.


A number of the dairy giant's customers used WPC80 to make a range of products, including infant formula.

Countries affected include New Zealand, China, Thailand, Saudi Arabia and Vietnam.

The crisis has raised concerns that this country's reputation for high quality food - the driving force behind around $3 billion in annual dairy exports to China - may have been irreparably damaged.