PR opportunity for Fonterra after repackaging incident

An internal review's underway at Fonterra, following the arrest of 19 people over the on-selling of expired milk powder in China.

LISTEN ABOVE: Waikato University agri-business professor Jacqueline Rowarth speaks to Rachel Smalley on Bayleys Early Edition

A months-long investigation by Chinese police found one of the suspects sold the expired New Zealand milk products to another company, which re-packed and resold almost 300 tonnes to distributors. These distributors then on-sold the products both online and in wholesale.

Almost 100 tonnes of it has been seized, and authorities have shut down the websites selling the products.

A Fonterra spokesperson said the company backs the decision of authorities, and while they believe this is an isolated criminal incident, the case is being reviewed internally.

Fonterra is being encouraged to use the incident as a public-relations opportunity.

Waikato University agri-business professor Jacqueline Rowarth told Rachel Smalley she expects social media to fire up, and say this is why you should trust product packaged in New Zealand.

"It's also a moment for Fonterra to be out there, really promoting the New Zealand image."

ASB rural economist Nathan Penny told Mike Hosking those in Fonterra will be on edge over the incident.

"Given what's happened with the botulism scare and things like that, they'll be worried."

However, he added that "what we've seen so far, it appears the Chinese authorities have clamped down on this activity."