NZ Prime Minister John Key, top diplomat and trade chief to visit Beijing over dairy scandal

New Zealand Foreign Minister Murray McCully will visit China in about a week as both sides deal with fallout from a contamination scare involving the world's largest dairy exporter, Fonterra Co-operative Group.

McCully would be followed in a "few weeks or months" by Trade Minister Tim Groser and Prime Minister John Key would visit once a report on the incident was finished, spokeswoman Kelly Boxall said yesterday.

The value of New Zealand's dollar fell to a one-month low after Fonterra said on August 3 that a dirty pipe at a processing plant might have tainted whey protein, used in dairy formula, with botulism-causing bacteria. Beijing halted imports of some Fonterra products and Xinhua said buyers were losing faith in New Zealand's clean image.

"It's really about what is the damage to New Zealand's reputation, both for Fonterra and for dairy products, but also for the wider products we sell into the Chinese market and other markets overseas," Key told Television New Zealand yesterday. "Fonterra is the poster child for New Zealand's exports, whether we like that or not."

Key would wait to visit Beijing until an inquiry into the incident was completed because "he wants to be able to look them in the eye and give them answers", Boxall said. Groser was also planning to be in touch with his Sri Lankan counterpart after media reports that Fonterra had recalled milk powder in that country after the government claimed it contained traces of an agricultural chemical, Boxall said.

Dairy products are New Zealand's biggest foreign exchange earner, accounting for 28 per cent of overseas sales in an economy where exports make up about a third of output. Fonterra, New Zealand's biggest company, accounts for about a third of the world's trade in dairy products and posted revenue of NZ$19.8 billion (HK$123 billion) in the year through July 2012.