Sharechat Logo

Fonterra suspends Sri Lanka consumer operations after protests

Friday 23rd August 2013

Text too small?

Fonterra Cooperative Group says it has suspended its consumer operations in Sri Lanka, where sales of its products have been temporarily banned from sale, because of nationalist protests outside its local offices.

The company's Sri Lanka business is currently prevented by a court order from selling, advertising or making public statement with customers or consumers, it said in a statement. The company has begun legal action to resolve the order. Its operations have been closed because of "the unstable situation at the moment."

"The temporary suspension is the right thing to do," chief executive Theo Spierings said in the statement. "It is a precautionary measure to ensure our 755 people working there are safe. We have closed our plants and office in Sri Lanka, and have asked our people to stay at home."

Reuters reported yesterday that more than 100 members of Sri Lanka's National Freedom Front, a hardline nationalist political party in President Mahinda Rajapaksa's ruling coalition, protested outside Fonterra Brand Lanka's head office, 30 kilometres north of Colombo. Farmers are key supporters of the government.

The protestors held banners saying, "We should make our own milk powder", and "Ban toxic yoghourt advertisement immediately", while carrying a coffin with pictures of Fonterra brands, Reuters reported.

Spierings said his company "must do all that we can to protect our farmer shareholders' investment in Fonterra's Sri Lanka manufacturing and commercial operations."

Fonterra had "provided every possible assurance to the Sri Lankan authorities about the safety and quality of Fonterra's products, and remains committed to the Sri Lankan people," he said. "Recent events, however, have made it difficult to maintain day-to-day operations, and we need to get them resolved."

A Sri Lankan court last week imposed a 14 day temporary ban on Fonterra selling products in that nation amid claims they contained traces of a nitrate inhibitor. The ban followed news that Sri Lanka's Industrial Technology Institute had found chemical dicyandiamide (DCD) in two batches of milk powder it tested in results that Fonterra is disputing.

Three workers representing Sri Lanka's National Health Services Union won a temporary injunction to stop the Auckland-based company from selling its products in Sri Lanka.

Radio New Zealand yesterday reported a Sri Lankan court had issued a summons to Fonterra subsidiary Fonterra Brands Lanka and four of its officials for contempt of court for not adhering to the ban.

BusinessDesk.co.nz

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar sags after avalanche of data and central bank action
Fonterra board starts planning chair succession
Fulton Hogan keeps Australian civil construction unit
Time for congestion pricing has come - NZIER
Colliers defends KiwiBuild as 'far from a colossal failure'
Pushpay shares rise as cost-cutting upgrades earnings guidance
20th September 2019 Morning Report
NZ dollar weaker against British pound on EC president's Brexit optimism
Todd plans Kapuni drilling campaign
MARKET CLOSE: NZ shares gain; appetite for KFC helps Restaurant Brands hit record

IRG See IRG research reports