French food giant Danone has confirmed it is seeking full
compensation from Fonterra for damage caused to its business
following the New Zealand dairy company's botulism scare.
In a statement provided to the Reuters news agency, Danone
said it had sent a notice of dispute to Fonterra on September
"Danone is determined that it should be fully compensated for
damages caused by the recall on eight markets," the company
"Food safety is a non-negotiable priority and we are
cooperating fully with local authorities and key stakeholders
to determine the causes of the situation and clarify
While Danone did not provide a figure on the compensation it
was seeking, Business Herald columnist Fran O'Sullivan has
reported that the French firm is "arguing behind the scenes"
that the brand damage has cost it around 200 million ($326
Danone products were recalled in eight countries, including
New Zealand and China, after Fonterra suspected that 38
tonnes of whey protein, used in a range of consumer products
such as infant formula, had been contaminated with a
It turned out to be a false alarm.
Danone was hardest hit in China, where consumers remain
highly sensitive to food safety scares following the 2008
melamine scandal, when six babies died and thousands more
became sick after consuming dairy products tainted with the
In New Zealand, Danone-owned Nutricia had to recall 67,000
cans of its Karicare infant formula brand.
Fonterra yesterday confirmed it was in a dispute resolution
process with Danone.
"The discussions between Fonterra and Danone had been
confidential with a view to reaching a mutually acceptable
commercial outcome however some aspects of these discussions
have been made public this morning in the press," the company
said. "Fonterra confirms that the discussions remain ongoing
but strongly denies any legal liability to Danone in relation
to the recall."
At its annual result announcement last week Fonterra said it
had set aside $14 million for dealing with the fallout of the
- Christopher Adams of the NZ Herald