Prime Minister John Key says Justice Minister Judith Collins has handled the Oravida situation "very poorly'', after she admitted having dinner with the company's chairman.

Mrs Collins revealed today she had a dinner with the head of Oravida Stone Shi and a senior Chinese government official while in China last year and admits she was wrong not to disclose the dinner last week.

Mrs Collins has been under pressure to explain her dealings with the milk company Oravida, where her husband is a director and this morning said she was told to reveal the dinner by the Prime Minister chief of staff Wayne Eagleson.

Mr Key told media this afternoon that Mrs Collins was an outstanding minister, but he was very disappointed in her.


He said she had misled media and others by omitting details about her trip to China.

"She had a responsibility to reveal all of the meetings that she held in Beijing, even if one of them was a ... private meeting, and she certainly should have made me aware of that."

Mr Key said her actions had led to accusations of a perception of a conflict of interest, "and that's unacceptable".

He made it clear to her "in no uncertain terms" how disappointed he was in her, and said she could not repeat the mistake.

Asked whether she was on her last chance, Mr Key said: "I wouldn't want to be in her shoes if there was a repeat of it."

Mr Key said Mrs Collins had still not breached the Cabinet Manual in terms of endorsing a company, but she risked breaching the rules on conflicts of interest.

"It's shades of grey. I've had this situation before (with former MP Richard Worth) and the approach I've taken is the same one, where I've said to the minister it's extremely unwise."

At a media stand up at Parliament today, Mrs Collins said she had a discussion with Mr Eagleson last night and told him of the dinner in Beijing with Mr Shi and Julia Xu - "very very close personal friends" - who are also Oravida's bosses.


Also in attendance was a senior Chinese border control official who was a friend of Mr Shi and Ms Xu. Ms Collins also disclosed she'd attended a luncheon with Mr Shi and Ms Xu earlier the same day.

Mr Eagleson quizzed Ms Collins on her visit last night after Mr Key acknowledged that Ms Collins "promoted" but did not endorse Oravida's products when she visited its Shanghai offices at the end of her trip.

She said in hindsight she could also have treated the dinner as part of the official business of the trip, rather than a private event.

However she continued to maintain there was no conflict of interest in her meetings with Mr Shi or visit to Oravida.

She denied that the dinner would have been of assistance to Oravida.

Mrs Collins' policy advisor was also at the dinner. She would not say who paid for it, but said it was not her or the taxpayer.

"It would have been better if I had not treated it like a private dinner which it was but had actually reported it through."

"Wayne said to me, and he was quite right, that I should have told you that last week.
"I'm wrong I should have broadened it out."

"If anyone feels that I've done something wrong then I would apologise for that because I should have told you that last week."

To tell reporters and the public she had got something wrong was "not my natural state of affairs", she said.

A spokeswoman for Mr Key confirmed he met with Ms Collins this morning "and expressed his disappointment that the Minister had not advised him earlier of the dinner in China".

"The Prime Minister considers that the cumulative effect of the interaction with Oravida in China may give rise to the perception of a conflict of interest. It was unwise for the Minister to have put herself in this position, and the Prime Minister has made it clear to Ms Collins that she needs to better manage any situation that could give rise to such a perception."

Labour Leader David Cunliffe said Mr Key should stand Ms Collins down "while he gets to the bottom of her secret meetings with Chinese border officials, her policy advisor and the Chinese managing director of her husband's company Oravida".

"Judith Collins has been forced to admit she hasn't told the whole truth about her visit to China last October.

"Now we learn she not only visited Oravida and endorsed its product, but she also had lunch and dinner with the company's boss Stone Shi. This dinner was also attended by a Chinese border official and her policy advisor."

Mr Cunliffe said the presence of a Chinese border official, "raises serious questions about the minister facilitating access for products supplied to Oravida by Sanfords; a company partly owned by the family of National Party President Peter Goodfellow".

"New Zealanders will be dumbfounded these meetings weren't revealed earlier. John Key is well aware how bad this looks. This belated admission of favours for the big end of town is business as usual for the National Party."