WELLINGTON, New Zealand -- New Zealand dairy giant Fonterra announced Saturday that tests of some ingredients used in infant formula and sports drinks have turned up a type of bacteria that could cause botulism, and customers were urgently checking their supply chains.
The company 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 a deadly tainted milk formula scandal involving local producers a few years ago.
The Centers for Disease Control describes botulism as a rare but sometimes fatal paralytic illness caused by a nerve toxin.
Fonterra said it has told eight of its customers of the problem, and they were investigating whether any of the affected product is in their supply chain. Fonterra said those companies, which it did not identify, will initiate consumer product recalls if the bacteria is found.
Fonterra didn't offer details on the customers, countries or specific products which may be affected. The company planned to hold a news conference later Saturday.
Fonterra said in a press release that it identified a potential quality problem in March when a product tested positive for the bacteria Clostridium. The company said many strains of the bacteria are harmless, and product samples were put through intensive testing over the following months. It said that on July 31 it discovered a strain of the bacteria that can cause botulism.
The company said the problem involves three batches of whey protein concentrate produced at a single New Zealand manufacturing site in May 2012.
New Zealand's Ministry for Primary Industries said it was working with the company to investigate.
Fonterra Chief Executive Theo Spierings said in the press release that food safety was the company's top priority.
"We are acting quickly," he said. "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."
Rabobank's 2012 Global Dairy Top 20 report ranked Fonterra as the world's fourth-largest dairy company by revenue behind Nestlé, Danone and Lactalis. The company is a cooperative, partially owned by thousands of farmers.
In 2011 the company collected 15.4 billion liters (4.1 billion gallons) of milk in New Zealand, representing about 90 percent of the country's total.