NZ economy not likely to be badly hurt by dairy scare: Finance minister

The shelves in a Wellington supermarket where a batch of baby formula made by Fonterra have been stripped clear on Aug 5, 2013. -- FILE PHOTO: AFP
The shelves in a Wellington supermarket where a batch of baby formula made by Fonterra have been stripped clear on Aug 5, 2013. -- FILE PHOTO: AFP

WELLINGTON (REUTERS) - The New Zealand economy is likely to escape any significant damage as a result of the Fonterra contamination scare, the finance minister said on Tuesday.

Mr Bill English said the ban on some dairy products made from the suspect Fonterra ingredient was limited and affected a small range of goods.

"The economic impact of the amount of product currently under restrictions is sufficiently small (that) it wouldn't have a discernible product on our GDP," Mr English said in reply to a question in the parliament.

However, he said there was some longer term risk to the country's reputation.

"But if these circumstances transparently and effectively, we ought to be able to reduce those risks."

Dairy produce makes up for about a quarter of the country's NZ$46 billion (S$46 billion)export earnings, and the dairy industry accounts for around 7 percent of the country's gross domestic product.

Fonterra was hit by further product recalls in China and Hong Kong on Tuesday, amid fears that product bans might be extended.