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Fonterra In Limbo Following Protests

New Zealand dairy giant Fonterra is reported to have told its 755 employees in Sri Lanka to go home as a security measure after protests over food safety took place outside its office in Biyagama last week. Fonterra employs are mostly Sri Lankan nationals and six are New Zealanders.
A government ally, the NFF protested outside the Fonterra office demanding that the company respect a court order and withdraw what NFF said was contaminated milk products from the market.
Meanwhile Fonterra Co-operative said on Friday it had suspended operations in Sri Lanka following product bans, court cases and the angry demonstrations over its milk products in the country.
However late Friday afternoon, the Gampaha District Court lifted the enjoining order issued against Fonterra Lanka, preventing it from selling, distribution and advertising of its brands.
Authorities have maintained that they found high levels of the agricultural chemical dicyandiamide (DCD) in two batches of milk powder it tested, an accusation that Fonterra has vehemently disputed.
“The temporary suspension is the right thing to do. It is a precautionary measure to ensure our 755 people working there are safe,” Chief Executive, Theo Spierings said in a statement.
“Recent events, however, have made it difficult to maintain day-to-day operations, and we need to get them resolved.”
Four of Fonterra’s top officials face contempt of court charges, accused of not adhering to an earlier ruling that banned sales and advertising of all Fonterra milk products.
Fonterra is in Sri Lanka for around 50 years, and its Anchor brand commands a 65 percent market share of the country’s milk powder industry.
In New Zealand, Sri Lanka’s actions are widely seen as a move to pressure Fonterra and promote local dairy farmers.
“There clearly are industry politics going on over there,” said Keith Woodford, professor of Farm Management and Agribusiness at Lincoln University said.
“There’s no doubt that Sri Lanka wishes to have its own dairy industry.”
Sri Lanka is a top-10 importer of New Zealand dairy products, with roughly $196 million of the country’s total milk powder imports of around $300 million coming from New Zealand last year. The majority is supplied by Fonterra.
New Zealand’s Economic Development Minister, Steven Joyce declined to be drawn on whether the protests were politically motivated, but said there had been discussion in Sri Lanka about the development of its dairy industry.
“Obviously there are serious issues that need to be worked through with the Sri Lankan government and we are helping with that,” Joyce told reporters.

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