Authorities in China have suspended flights of fresh milk from Victoria.
Australian Dairy Farms Group, the owner of six dairies, says it only found out via media reports about the suspension of a licence held by its Camperdown Dairy business to export fresh milk into China.
A short time ago, its shares were down 13% to $0.165.
The reports said “disease causing” bacteria had been found in the fresh milk.
“We have heard media reports of test results within the Chinese market that are not supported by the independent test result of products leaving the Camperdown factory,” the company says.
“At no time has any test result showed any harmful bacteria.”
The dairy industry is under pressure from a global glut of milk and milk products which has driven down the price paid to farmers.
Camperdown Dairy has been exporting fresh milk to China each Monday under licensing that requires approvals in both Australia and China. The shipments are airfreighted from Tullamarine airport.
The management at Camperdown was advised by Australian government officials that the Chinese government had requested re-testing for shelf live validation of all Australian exporters of fresh milk.
The company says it voluntarily elected to suspend exports to China and review all shelf live validation requirements.
China milk sales represent only 2% of total sales.
The company says it one of only two players exporting to China with rapid clearance accreditation for fresh milk. The business is in discussions with a number of potential customers to grow export sales in Asia.
Australian Dairy Farms Group bought Camperdown Dairy Company in April for $11 million.