Danone, Fonterra in Talks to Resolve Dispute over Recall

NEW ZEALANDDairy exporter Fonterra last week confirmed it is seeking to resolve a dispute with Danone following an August recall of Fonterra's whey protein concentrate.

In an Oct. 2 statement, Fonterra verified the talks "remain ongoing" but the company "strongly" denied being liable to Danone. Fonterra said the talks "had been confidential with a view to reaching a mutually acceptable commercial outcome" before aspects of the discussions were reported in the media. 

Danone previously noted the recalls hurt its third-quarter baby nutrition sales in Asia.

Fonterra implemented measures to withdraw from Asia and its home country of New Zealand three batches of whey protein concentrate over concerns that it had the potential to cause the sometimes fatal disease botulism. But the New Zealand government later confirmed the bacteria found in Fonterra's concentrate was not associated with any food-safety issues.

The concentrate is used in a number of products including beverages, infant formula and food supplements.

Danone did not respond to an request Monday on the status of the dispute or the total financial losses it has suffered due to the recall. But Fairfax NZ News reported that the incident cost Danone $326 million.

Fonterra maintains it did the right thing by issuing the voluntary recall after tests mistakenly revealed its product was contaminated with Clostridium botulinum.

Danone told Fairfax NZ News is was seeking to resolve the dispute with Fonterra "prior to any litigation, as Danone is determined that it should be fully compensated for damages caused by the recall on eight markets".

The markets affected including Cambodia, China, Hong Kong, Malaysia, New Zealand, Singapore, Thailand and Vietnam.