It has led to a global recall of up to 1,000 tons of dairy products across seven countries, including China.
Botulism is one of the most dangerous forms of food poisoning, often leading to paralysis.
New Zealand’s Ministry of Primary Industries confirmed on Saturday that the tainted products included infant formula, sports drinks, protein drinks and other beverages.
The bacteria was found in three batches of Fonterra’s whey protein used in infants’ Nutricia Karicare follow-on formula, Fonterra said.
The whey product was produced in May 2012, with a dirty pipe at one of its processing plants in Waikato responsible for the contamination, the company said.
Fonterra – the fourth largest diary company in the world – says it has urged its customers to urgently check their supply chains.
“We are acting quickly,” Fonterra chief executive Theo Spierings said.
“Our focus is to get information out about potentially affected product as fast as possible so that it can be taken off supermarket shelves and, where it has already been purchased, can be returned.”
The countries affected beside New Zealand include China, Australia, Thailand, Malaysia, Vietnam and Saudi Arabia.
Fonterra said there had been no reports of any illness linked to the affected whey product.
The dairy industry powers New Zealand’s economy, with the country exporting up to 95% of its milk.