Fonterra confirms dispute with Danone following recall, denies liability

Wednesday 2nd October 2013

Fonterra Cooperative Group said it is in talks with Danone after its recall of whey protein concentrate hurt sales of Karicare infant formula made by the French dairy company's Nutricia unit.

Danone is arguing it suffered major brand damage in a recall of infant formula across nine countries that cost it up to 200 million euros, the NZ Herald reported today. That suggests it may be seeking much more than the $14 million Fonterra chief executive Theo Spierings has said his company set aside for settling any damages claims.

Fonterra issued a three paragraph statement today, saying some aspects of its talks with Danone had been made public.

The dairy company "is in a dispute resolution process with Danone following the whey protein concentrate precautionary recall initiated in August this year," it said. "The discussions between Fonterra and Danone had been confidential with a view to reaching a mutually acceptable commercial outcome."

Fonterra "strongly denies any legal liability to Danone in relation to the recall," it said in a statement to the NZX, where units of the Fonterra Shareholders' Fund trade. The units rose 0.3 percent to $7.05 today.

Prime Minister John Key met Danone executives at a reception at the embassy in Paris last month and assured them all information from investigations into the recall would be made public, the Herald reported.

Key also argued that the buck should stop with Fonterra, not the government, with Danone understood to be considering action against the crown research institute AgResearch, which did the initial testing that sparked the recall, the Herald reported.

BusinessDesk.co.nz

Comments from our readers

No comments yet