Three batches of whey protein concentrate, totaling 38 metric tons, tested positive for Clostridium botulinum, the company said. The bacterium can cause botulism, a rare and sometimes fatal illness. Fonterra, one of the world's largest dairy exporters, said eight customers had been affected, in New Zealand, Australia, China, Vietnam, Thailand, Malaysia and Saudi Arabia.

Fonterra said Monday that the contamination had been traced to a pipe that had not been properly cleaned in one of its New Zealand processing plants. Executives stressed that the source of the problem had been fixed.

The company's chief executive, Theo Spierings, flew to Beijing for a news conference to address the issue. "We deeply apologise to the people who have been affected by the issue," Spierings said at the conference.

China and Vietnam stopped some dairy imports from New Zealand in response to the contamination scare, but the company said they had not issued blanket bans.

The affected batches of whey protein were produced in May 2012, but the company said the first signs of contamination had not been spotted until March, when the product was tested in Australia. The specific strain was not identified until July 31.

New Zealand Prime Minister John Key slammed Fonterra saying it was difficult to understand why the firm did not act immediately. "I'm a bit staggered that in May of 2012, when this whey was produced, that it (Fonterra) did show something in its testing, but clearly not something that was of concern to the company because they allowed it to go out," he told Radio New Zealand.

Fonterra executives have been questioned in New Zealand and China about why it took so long to identify the problem and alert consumers.

JONATHAN HUTCHISON