As a steadfast Kiwi, I am nothing short but bound by law to love anything and everything our tiny country is good at. Rugby? It's our national sport. Lord of the Rings? Who doesn't love a 9-hour, 3-movie trilogy about small men with hairy feet that has turned our entire tourism industry into a real-life movie billboard. Sheep? Love them. All 60 million of them. And I love that when I venture overseas that's the only thing anyone ever associates with New Zealand.

But in most instances it punches well above its 4 million people-strong weight. And as a proud, agricultural nation, one thing we are especially proud of is our dairy industry. Dairy giant Fonterra, New Zealand's biggest company, accounts for about 40 per cent of worldwide dairy exports. It's a company New Zealand has always, in true Kiwi-style, got behind as we do with anything that enjoys a relative amount of success. And with current allegations and concerns that Fonterra's milk is unsafe after traces of nitrate inhibitor were found in it, the world may be running scared from the brand, but many will be taking the news with a grain of salt.

Last Friday, Fonterra issued a press release supporting moves made by New Zealand's two main fertiliser suppliers to defer sales and use of Dicyandiamide (DCD) treatment on land used for agriculture until further notice. This followed admissions by the company in September that traces of DCD, a fertiliser used to prevent nitrogen seeping into waterways and control greenhouse gases, had been found in milk tested by Fonterra.

Hot on the heels of the last Fonterra milk scandal, this issue gained traction around the world and was soon making headlines in the United States and China, two of New Zealand's biggest trade partners. Co-op chief executive Theo Spierings was quick to play down any threat to human health, however, stating the entire situation had been blown out of proportion.

"We have strong science and we are providing assurances about the safety of our products," he said. "Let's keep it in perspective. Our testing has found only minute traces of DCD in samples of some of our products. It is important to remember that the minute traces detected were around 100 times lower than acceptable levels under European food safety limits."

He added: "The bottom line? Our products are safe. Customers can rest assured."

Sounds reassuring, right? But even if the saga is being dramatised to Hollywood proportions, this will undoubtedly unnerve the Indonesian market, which New Zealand has poured millions of dollars of resources in a bid to tap into.

In the last 12 months New Zealand has pledged to provide NZ$6 million (S$6.2 million) in a dairy cooperation programme with Indonesia to help their domestic dairy industry grow. Prior to that, Fonterra had announced plans to much excitement to invest in a multi-million dollar processing plant in Indonesia.

To put things in perspective, dairy makes up almost half of New Zealand's entire exports to Indonesia. New Zealand is really relying on dairy, and to a lesser extent meat, exports to help them penetrate the burgeoning Indonesian economy. Without dairy and meat we have little else to offer Indonesia, and will be left behind as one of the most economically stimulating countries in Asean takes off and leaves us in their dust.

One of the biggest hurdles Fonterra faces is the fact that many countries do not have standards for DCD traces, aside from Europe. This could cast a damning light on Fonterra products if countries choose to cast these "contaminated" products aside without looking into actual health effects.

This is not to mention the consumers who are ready to jump ship on the back of the Sanlu milk scandal of 2008, when six infants died and 860 were hospitalised in China after drinking milk powder laced with melamine. Fonterra owned 46 per cent of Sanlu, and their reputation was damaged as a result. If people start dying, which admittedly it does not sound like they are even minutely close to doing, there may be no coming back from it for the company.

So, is this a "where there's smoke there's fire" scenario? Or simply an honest disclosure from the company, that has grown legs of its own and morphed into something that is now sparking moral panic rather than fact-based news? For me, and not just because I am a tenacious Kiwi, it sounds like the latter. The Sanlu scandal has forever marred the dairy powerhouse, and now whenever something remotely newsworthy originates from their camp, the world watches.

So long as Spierings has nothing to hide, the company is simply paying for its past mistakes in the form of unwanted media attention.

Ashleigh Stewart is an intern at the ST Indonesia Bureau under a programme run by the Australian Consortium for 'In-Country' Indonesian Studies, which introduces young students and graduates to Indonesia. She is from Christchurch and recently got a post-graduate diploma in journalism.