A Sri Lankan court today lifted an enjoining order against New Zealand dairy giant Fonterra that barred it from selling its products in the country over fears of chemical contamination after the company announced a temporary closure of its local operations.
The district court at Gampaha near here, had last week restrained Fonterra from releasing stocks, distributing and advertising of milk powder and dairy products.
The order came as a result of two health services trade unions petitioning the court after health concerns were raised on Fonterra products having DCD (Dicyandiamide) and Whey protein.
Fonterra on its part had already announced the temporary closure of its Sri Lankan operations earlier today "to protect our people and farmers' assets", citing "unstable situation" in the island.
The move was sparked in part due to protests by 200 people outside one of its Sri Lankan factories yesterday, the company said.
Fonterra has also been embroiled in an unrelated botulism scare earlier this month which led to global product recalls.
The ministry of health last week ordered the withdrawal of two batches of Fonterra products over fears of contamination.
The company has insisted there is no contamination, saying tests carried out by the Sri Lankan government are inaccurate.
The local directors of Fonterra also faced contempt of court charges for defying the enjoining order to stop distribution and advertising of its products.
Sri Lanka has been a major market for New Zealand's dairy products since the late 1970s, worth over USD 200 million a year.