Fonterra says it is "extremely disappointed" that China's Beingmate Baby & Child Food, in which it has an 18.8 per cent stake, has issued another earnings downgrade - this time to a loss of $171-$214 million for the December 2017 year.

The previous forecast was for a loss of RMB350m to RMB500m ($75m to $107m).

Fonterra said it was assessing the implications the loss would have on its first half result.

"As an investor in Beingmate, we are extremely disappointed by this announcement and the on-going performance of the company," Fonterra said in a statement.

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The co-op said it was seeking more information on the forecast downgrade in addition to receiving Beingmate's full-year financial statements.

"We will consider the financial implications on our investment for the purposes of our upcoming interim financial results," Fonterra said.

"We are also aware that as part of this announcement, four Beingmate directors, including the two directors designated by Fonterra, have expressed reservations relating to some aspects of Beingmate's financial management and reporting practices," Fonterra said.

"We have total confidence in the judgement of our designated directors - Johan Priem and Christina Zhu - and that their actions are in the best interests of Beingmate and all of its shareholders," it said.

"We are concerned about the reservations they have expressed and are seeking clarification on the matters of concern."

Fonterra said that despite Beingmate's recent performance, the strategic rationale for its broader partnership with Beingmate still stood.

"We are disappointed that Beingmate is not maximising the opportunity created by the early registration of its 51 [infant formula] formulations under the new registration rules," Fonterra said.

"The Chinese market is growing rapidly and within five years, forecast demand for infant and baby dairy products will be more than the total for other global markets, so the potential remain."

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China is one of Fonterra's largest global markets, accounting for $3.4 billion of sales revenue and a normalised earnings contribution of greater than $200 million in 2017.