Fonterra has run into more problems in Sri Lanka, which has suspended the sale of some Anchor milk powder over food-safety fears.

But the dairy giant says the affected milk powder is safe to consume.

Fonterra has confirmed a Reuters report that Sri Lanka's health ministry had suspended the distribution and sale of the three batches of Anchor milk powder. According to Reuters the suspension followed a complaint of food poisoning in some children in the southern village of Girandurukotte, 224 kilometres from the capital Colombo. Reuters reported 76 tonnes of milk powder was affected.

Sanath Mahawithanage, Fonterra Brands Sri Lanka associate director scientific and regulatory affairs, said in a statement the company was working with Sri Lankan officials to get the suspension lifted.

He said Fonterra's testing had cleared the product.

Fonterra suspended Sri Lanka operations in August last year after facing product bans, court cases and angry demonstrators over its milk products in that country.

The company was banned by a Sri Lankan court from selling or advertising its products after the country's food safety authorities said they found high levels of the agricultural chemical dicyandiamide in two batches of milk powder. Fonterra vigorously disputed the finding.

A court order later removed the ban, allowing the company to continue its operations.

Fonterra has had a presence in Sri Lanka for about 50 years and its Anchor brand commands more than 60 per cent market share.

Sri Lanka's actions last year were widely seen as a move to pressure Fonterra and promote local dairy farmers as the government has been trying to promote local fresh milk to stem capital flows out of the country and help domestic producers.

(The Dominion Post)