CHINA has recalled potentially contaminated milk products from New Zealand amid a botulism scare in a move that could have huge implications for the Irish dairy business.
New Zealand's super co-op Fonterra said a whey product used to make infant formulae and sports drinks had been found to contain bacteria that can cause botulism, a potentially fatal disease that affects the muscles and can cause respiratory problems. Infant botulism can attack the intestinal system.
Whey is a by-product of milk production and has become increasingly valuable as consumers look for more sources of protein. The contaminated product was sent to factories all over the Middle East and Asia.
In response to the contamination, China has stopped the importation of all New Zealand milk powder, while Russia has banned all Fonterra goods.
That ban could open the way for Irish dairy producers, who plan to increase the amount of milk they sell by up to 50pc in two years' time when the EU drops milk quotas and are desperately looking to break into new markets.
Fonterra has traditionally dominated the international milk market in China, although Irish companies have made some inroads in recent years.
The likes of Kerry Group, Glanbia, Dairygold and Lakeland Dairies have long had business interests in China, and all have pointed to that country as a key market for the excess milk supply that will come on stream after 2015.
One major milk producer said it was "closely monitoring" Fonterra's problems and would be "quick to move in" if a gap in the Chinese market opens up.
The agri sector is one of the biggest exporters in the country, with €2bn worth of goods being sent overseas in the first three months of this year. Most of those, however, go to Europe and the US.