New Zealand dairy giant Fonterra said it remains “committed” to Sri Lanka, despite initiating a temporary suspension on operations in the country.

The company said today (23 August) it had taken the “precautionary step” of temporarily suspending its consumer operations in Sri Lanka because of “the unstable situation at the moment”.

Chief executive Theo Spierings said Fonterra had two “immediate priorities”. Those, he said, are “protecting its people, and protecting its farmer shareholders’ assets”.

“The temporary suspension is the right thing to do. 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.

“At the same time, we must do all that we can to protect our farmer shareholders’ investment in Fonterra’s Sri Lanka manufacturing and commercial operations.”

Fonterra yesterday “refuted” claims it has not complied with a ban on selling and advertising products in Sri Lanka.

The world’s largest dairy exporter faces contempt of court charges amid allegations it continued to distribute and market milk powder after a two-week ban was introduced on Friday (16 August). Fonterra was hit with the ban after Sri Lankan tests claimed to show products contained the agricultural chemical DCD.

Spierings said today that Fonterra has “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.

“Recent events, however, have made it difficult to maintain day-to-day operations, and we need to get them resolved,” he said. “Fonterra Sri Lanka is currently subject to a court Enjoining Order which has shut down our ability to sell product, advertise it or make public statements in any way with customers or consumers in Sri Lanka.

“Legal action is underway that is aimed at resolving the Enjoining Order.”