Fonterra chief says supply contracts intact after food safety scare

New Zealand dairy giant Fonterra insisted that its customers were sticking to their supply contracts with the world’s largest dairy exporter for the moment, even as Singapore expanded its recall of milk formula products containing a tainted ingredient produced the company.

Danone Dumex took more infant formula tins off supermarket shelves in Singapore as a precautionary measure after being told by Fonterra that the product was packed on a production line that may have held residue of the questionable material, Singapore’s Channel NewsAsia reported, quoting a statement from Danone Dumex.

Fonterra CEO Theo Spierings said he had not seen any signs of a reduction in supply contracts by its clientele, which include major food and beverage multinationals, but he acknowledged the risk that its bottom line may take a hit in the future.

“The answer to that question is no,” he said in response to a reporter’s query at a news conference regarding whether the company has seen a reduction in orders since the announcement that Fonterra had discovered it had exported tainted whey protein powder nearly a week ago.

“Of course that discussion will come to the table, as we do have contracts ... but there have been no discussions on future contracts or those kinds of things,” Spierings said.