Danone is reviewing its “recourse and compensation options” in relation to the Fonterra whey protein concentrate (WPC) botulism alert that led it to pull potentially-affected infant formula products from shelves in eight countries.
Last month, Danone-owned infant nutrition firms, Dumex and Nutricia Australia New Zealand (Nutricia ANZ), recalled products in eight countries as a “precautionary measure” after Fonterra issued a warning to customers that WPC potentially contaminated with Clostridium botulinum had entered the supply chain.
Tests have since confirmed that the bacteria found in the affected batches were not Clostridium botulinum, but Clostridium sporogenes – a non-toxic Clostridium strain.
With the botulism scare now behind it, Danone is looking to recoup the “incurred non-current costs to cover recall procedures and efforts to boost sales.”
“Fonterra’s responsibility is about base powder production delivery to Danone’s factories," Danone spokeswoman, Agnes Berthet-D’Anthonay, told DairyReporter.com.
"Those base powders include whey protein concentrate (WPC), the ingredient that was the purpose of the alert. This WPC is produced by Fonterra in New Zealand and once produced is sent to another Fonterra factory in Australia for incorporation in the base powders.”
“Danone is currently studying the different steps that led to this situation and that had an impact on both Danone’s brands & subsidiaries and is reviewing its recourse and compensation options,” Berthet-D’Anthonay added.
Q3 sales “will be down”
Despite no evidence that their products were tainted, Nutricia Australia New Zealand (Nutricia ANZ) pulled potentially-affected products from shelves in New Zealand, and Dumex initiated product recalls in Cambodia, Thailand, Hong Kong, China, Malaysia, and Singapore.
“None of the many tests conducted by the Group, both before and after this critical period, showed any contamination whatsoever of its products with Clostridium botulinum,” said an additional statement issued by Danone.
“But because Danone makes consumer safety an absolute priority, its teams nonetheless quickly and efficiently deployed recall procedures.”
The recalls, which involved around 67,000 units in New Zealand alone, are expected to have a “significant impact” on the third quarter results of Danone’s Asian Baby Nutrition business.
According to Danone CFO, Pierre-André Térisse, the division’s third quarter sales “will be down.”
In an effort to offset this shortfall, Danone is “deploying action plans to restore sales in affected markets,” Térisse added.
“No plans to sue Fonterra”
Confirmation from Paris that Danone may seek compensation from Fonterra over the WPC botulism alert comes just days after Nutricia ANZ rubbished reports that it is considering legal action against Fonterra.
A spokesperson for Nutricia ANZ told DairyReporter.com last week: “Nutricia is currently considering its options, but there are no plans to sue Fonterra.”