Local infant formula producers are optimistic the 1080 threat is minimal but are fearful of the reputation damage it could cause as the industry recovers from earlier food safety scares.
Fonterra's 2013 false botulism scare spooked Chinese consumers and took a heavy toll on the infant formula industry.
New Zealand Infant Formula Exporters Association chairman Michael Barnett said the 1080 threat could have a worse impact on the industry than the 2013 scare.
"It's a test for our brand internationally."
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In terms of the reaction in China, Mr Barnett said the next 48 hours were going to be critical.
"As we saw with the previous [Fonterra] WPC80 event, it wasn't the standard media that did the damage to New Zealand product in China, it was the social media," he said.
Mr Barnett said he was staggered that a "despicable individual" had used the 1080 threat.
"There could be a high price for New Zealand to pay."
Marco Marinkovich, founder of infant formula firm KiwiMilk Nutrition, said his biggest concern was how the Ministry for Primary Industries would handle the Chinese media coverage of the 1080 threat.
"Our biggest threat is not this blackmailer but how we manage the perception in China." Mr Marinkovich said there was a risk that the Chinese Government, which wants to grow its own domestic infant formula industry, could play up the 1080 threat for its own competitive advantage.