The government must explain why it didn't make the latest news public if it was aware of it, the opposition Labour Party primary-industries spokesman Damien O'Connor said in emailed comments to The Wall Street Journal.

In May Shanghai authorities stopped 42 metric tons of Fonterra Co-Operative Group Ltd. milk powder from entering the country because of elevated nitrate levels, according to Mr. O'Connor, who cited a China Daily website report from July.

Excessive nitrate can impair the delivery of oxygen through the blood.

The milk powder was tested in New Zealand and met New Zealand specifications, a Fonterra spokesman said on Wednesday. "It was then shipped to China where it was tested again and did not meet their testing specifications," he told The Wall Street Journal. This sometimes happens where different laboratories use different methods, according to the spokesman.

"In this case we chose to accept the Chinese laboratory results and implemented the necessary processes and documentation that is required for advising regulators in both China and New Zealand of noncompliant product," he said.

Fonterra is already under fire for a recent food-safety scare—one of several that have recently dented New Zealand's image as a supplier of premium-quality dairy products. Dairy products represent the nation's biggest export--generating some 11.3 billion New Zealand dollars (US$9.0 billion) in the year to June 30.

In early August Fonterra warned its products may contain a bacteria capable of causing deadly food poisoning, prompting recalls in several countries and leading China and Russia to ban some.

In a separate incident, almost 400 kilograms of the milk protein lactoferrin with more-than-normal levels of nitrate were exported to China, local farmers' cooperative Westland Milk Products admitted this week.