Risk of more bans on dairy exports

Gary Romano.

Trade Minister Tim Groser warns further international bans on New Zealand dairy exports remain a real threat after the Fonterra botulism scare, which yesterday claimed its first scalp with the resignation of executive Gary Romano.

Mr Romano, Fonterra's managing director of milk products, took a leading role in fronting over the botulism scare two weeks ago, but resigned with immediate effect yesterday.

While there have been calls for heads to roll over the discovery of botulism-causing bacteria in Fonterra-produced whey protein concentrate, Fonterra chief executive Theo Spierings said Mr Romano's resignation was "his decision".

Mr Romano's resignation comes a day after reports of a ban on Fonterra products by Russia, Kazakhstan and Belarus were officially confirmed. Russian media have reported the bans are unlikely to be lifted this year.

Russian Federal Veterinary and Phyto-Sanitary Oversight Service head Sergei Dankvert told news agency Interfax authorities would want to inspect Fonterra facilities before lifting the ban but their inspection schedule for this year was full.

"So now only next year," he said.

Fonterra's director of communications, Kerry Underhill, said the company was "hoping the suspension will be lifted as soon as possible and we are working hard with the appropriate authorities to make this happen".

Mr Groser yesterday told the Herald further bans remained a risk.

"We've been saying right along that we should expect, given the uncertainties around this, that the tide can still go out."

He dismissed suggestions by Labour trade spokesman Clayton Cosgrove that he could have done more to prevent the Russian ban.

"The Russian authorities will be satisfied on the basis of technical information, not political lobbying.

"I would get on a plane right away if I received any advice that this was likely to be even marginally helpful.

"Any bustling little domestic politician who thought he could solve this with a photo op would be making a disastrous mistake."

Market commentator Arthur Lim said there was strong sentiment in China that a senior Fonterra staff member needed to be held responsible for the botulism scare and Mr Romano's resignation would keep the Chinese happy, in the short term.

"My sense is that Fonterra is half waking up to how serious the situation is."