New Zealand dairy company Fonterra on Friday temporarily halted operations in Sri Lanka after health authorities there found a toxic agricultural chemical in two batches of milk powder.
Fonterra is already dealing with a botulism controversy in China that put New Zealand Prime Minister John Key in damage-control mode of assuring Chinese customers his government would investigate the issue and ensure that the company corrected it.
A group of approximately 200 Sri Lankan demonstrators protested outside Fonterra’s Sri Lankan facilities on Thursday. Fonterra told it’s 755 employees to go home and closed the operation to protect their safety.
Fonterra has disputed Sri Lanka’s findings of two samples contaminated with the chemical dicyandiamide. Regardless, it recalled its Anchor full-cream milk powder and the Anchor 1+ milk powder for children.
A district court in Sri Lanka had ordered Fonterra not to sell its products earlier in the week, but it lifted that order on Friday.
After a nearly three-hour court session, Sudath Perera, a lawyer representing Fonterra, said, "The enjoining order was dissolved on suppression and misrepresentation of the facts submitted to the courts."
Fonterra has been working in Sri Lanka for 35 years. It collects milk and processes milk from over four thousand farmers. It is a longstanding Sri Lankan brand Fonterra this year launched a farmer training and education programme to help develop dairy farming skills in Sri Lanka.
Industry insiders say the claims against Fonterra products are politically motivated. They had escalated since the New Zealand exporter's problems this year with a string of food safety scares and alerts.
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