A brief statement from the company confirmed it had been contacted by the China National Development and Reform Commission (NDRC) regarding "a current broad-ranging investigation of consumer dairy products."

"Fonterra understands that the NDRC is reviewing a wide range of consumer businesses in the Chinese dairy industry as part of this work," it said.

"Fonterra operates a small consumer business in China and has a long history of engagement with government agencies and is co- operating fully with the NDRC."

Reports in the New Zealand media said the investigation was believed to be focusing on price manipulation involving major foreign companies selling milk powder into China.

Fonterra, a farmer-owned cooperative, is building dairy farms in China with the aim of producing 1 billion liters of milk there by 2020.