Fonterra has confirmed that it is looking into selling its stake in Sanlu, the Chinese dairy at the centre of the recent melamine contamination scandal.

In a statement the firm said it has been working with multiple parties, including government, to find a solution for Sanlu. "Some of those possible solutions may include a change in our shareholding level."

A number of companies are said to be interested in acquiring Sanlu, which ceased operations in mid-September after an extensive product recall.

Zong Qinghou, chief of China's leading beverage maker Wahaha, told the China Daily the firm is interested in gaining a supply of milk powder for its milk drinks.

Other dairies like Beijing-based Sanyuan Food and Wondersun are also rumoured to be interested in Sanlu.
Fonterra's statement added that the company could bring experience to China's dairy industry and improve safety standards, helping to rebuild consumer confidence. But, it said: "any solution involving Fonterra's long-term investment in Sanlu or other areas of the Chinese dairy industry will hinge on us having sufficient influence over key aspects of the dairy supply chain."