|Sri Lanka court slaps further ban on Fonterra over defiant promotional activities
New Zealand dairy company Fonterra whose milk products have been temporarily banned from Sri Lanka, drew further sanctions from a higher court after defying an earlier order to not advertise in the country.
Sri Lanka is New Zealand's fifth biggest market for milk powder.
A court had earlier prohibited Fonterra brands including Anchor milk powder following suspicions that its products contained traces of dicyandiamide, a nitrate inhibitor.
The Court of Appeal in Sri Lanka on Monday extended the restraining order on Fonterra Group Pvt Limited until September 3.
Fonterra's credibility took a battering earlier this month after China banned its dairy products over a deadly botulism bacteria found in three batches of whey protein – 38 metric tonnes. The ingredient was used in infant formula, beverages and yoghurt.
Last Friday, a court in Sri Lanka imposed a restraining order on advertisements by the Fonterra Group until August 30.
On Monday, lawyers told the Court of Appeal that an application for contempt of court would be filed against Fonterra for having defied the interim order prohibiting advertisements, which claimed that Fonterra products were 100 per cent safe and free of dicyandiamide.
The court was told that handbills bearing the name of Fonterra managing director had been distributed country wide, claiming that its products were 100 per cent safe, and free of DCD.
The case will be called again on September 2.
Johan Priem, Fonterra managing director, Asia Pacific, Middle East and Africa told the New Zealand Herald on Sunday: “Our independent testing has found no traces of DCD in any Fonterra-branded products in Sri Lanka and no affected whey protein concentrate or products containing it have been sent to the country.
“We are confident in the quality and safety of our products in Sri Lanka and we are currently working through our legal options there."
Sri Lanka's Health Ministry ordered the recall of two batches of Anchor brand milk powder last week, estimated to be 40 tonnes, following tests by Sri Lanka's Industrial Technology Institute indicating traces of the toxic agricultural chemicial DCD. Fonterra disputes the testing process and insists the products are DCD-free.