Fonterra Confirms Dispute Resolution Process With Danone Over Product Recall

   By Rebecca Howard 
 

WELLINGTON, New Zealand--New Zealand dairy giant Fonterra Co-operative Group Ltd. (FCG.NZ) confirmed Wednesday that it is in a dispute resolution process with Danone SA (BN.FR) following a recent global recall involving one of its dairy products.

In early August, Fonterra said three batches of one of its dairy products, whey protein concentrate, might contain harmful bacteria. The news led to product recalls in several countries including China and New Zealand, and affected Danone and other companies.

While subsequent testing indicated that the organism wasn't in fact harmful, the New Zealand government and Fonterra are holding a series of investigations into the incident and the way it was handled.

The discussions between Fonterra and Danone had been confidential with a view to reaching a mutually acceptable commercial outcome, Fonterra said Wednesday. It confirmed that discussions remain ongoing "but strongly denies any legal liability to Danone in relation to the recall."

Danone officials weren't immediately available for comment. The company said in late August that the recall of various of its infant formula products in eight Asian markets had had a "significant impact" on the group's Asian baby nutrition division.

Write to Rebecca Howard at [e-mail]

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