New Zealand authorities are recalling of up to 1,000 tons of dairy products across seven countries after Fonterra tests found a bacteria that could cause botulism.
New Zealand's Ministry of Primary Industries said on Saturday that the tainted products included baby formula, sports and protein drinks and other beverages.
It said countries affected beside New Zealand included China, Australia, Thailand, Malaysia, Vietnam and Saudi Arabia. Fonterra said its customers were urgently checking their supply chains.
One New Zealand company has locked down five batches of infant formula and China is asking importers to immediately recall products.
Fonterra said it had advised eight of its corporate customers that a strain of clostridium was found in three batches of whey powder, which can be used in sports drinks and formula. It advised them to start a product recall if necessary.
The New Zealand dairy giant is a big supplier of wholesale milk powder to Chinese dairy firms and is known to supply multinational food and beverage companies.
No illness reports
Fonterra said there had been no reports of any illness linked to the affected whey protein, and that fresh milk, yoghurt, cheese, spreads and UHT milk products were not affected.
"Our focus is to get information out about potentially affected product as fast as possible so that it can be taken off supermarket shelves, and where it has already been purchased, can be returned," Fonterra chief executive Theo Spierings said in a written statement.
"We are working closely with New Zealand's regulatory authority - the Ministry for Primary Industries - to keep New Zealand and offshore regulators informed."
Gary Romano, the managing director of milk products, said on Saturday that the time it took before the contamination was detected - the product was manufactured in May last year and it was not detected until July 31 this year - was consistent with modern day standards.
He said he did not think it would be helpful to name the customers the company believed had the tainted product.
Fonterra is preparing to enter China's booming branded infant formula market later this year. It processes the vast majority of milk produced in New Zealand, whose dairy sector generates more than 7 percent of the country's GDP.
Fonterra is the world's fourth-largest dairy company, with annual revenues of about $16 billion.
The news comes as a blow to New Zealand's dairy industry, which powers the country's economy. New Zealand exports about 95 percent of its milk.
Consumers in China and elsewhere are willing to pay a big premium for New Zealand infant formula because the country has a clean and healthy reputation.
Chinese consumers have a special interest after tainted local milk formula killed six babies in 2008.
The Centres for Disease Control describes botulism as a rare but sometimes fatal paralytic illness caused by a nerve toxin.