New Zealand Prime Minister John Key has announced that a representative from China would be allowed to witness the government investigation regarding Fonterra's milk scare causing China and other countries to issue an import ban on dairy products from the country.

The prime minister said the terms of the investigation, including its duration and other details have yet to be finalised. Mr Key wanted to finish the inquiry before he will leave for China. He said he needs to have answers so he can face the Chinese media with confidence and tell them to have faith in New Zealand products.

Mr Key has noted that when he announced he was going to China where Fonterra was lambasted for milk contamination and a botulism scare, many Chinese news agencies have shifted perspectives and saw the coming of New Zealand's prime minister as a good sign. Mr Key said China seems to like a political leader taking responsibility and facing the situation.

The government inquiry will be added to other investigations as announced by the Ministry for Primary Industries and Fonterra. Mr Key said New Zealand can save its international image. Based on statistics, only 1 per cent of milk products from Fonterra were banned by the Chinese government. Mr Key also believes international markets won't completely ban New Zealand products.

Minister of Primary Industries acting Director-General Scott Gallacher said the ministry will inquire about the decisions made by all parties involved, including Fonterra, and its observance of anomalies during the testing of whey protein concentrate said to contain bacteria linked with botulism.

Sri Lanka milk scare overblown

The announcement of a government inquiry comes after authorities in Sri Lanka ordered Fonterra to withdraw milk powder suspected of showing traces of dicyandiamide (DCD), a toxic chemical used in agriculture. The Sri Lankan recall order came despite the questionable accuracy of the testing.

The Ministry of Health in Sri Lanka said two batches of milk powder had been removed from the market due to the products' positive result for DCD. The government also issued an advertising ban of Fonterra's Anchor milk.

New Zealand's prime minister agrees with Fonterra's view that the issue was blown out of proportion and believes the DCD test results were indeed inaccurate.

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