Despite being an innocent bystander, Clover's sales have taken a hit thanks to Fonterra's recent food safety scare, which saw widespread recalls of infant formula products.
Functional ingredient manufacturer, Clover says the company has been "adversely affected" by the contamination scare, and expects sales revenue in the first half of the financial year 2014 to be approximately 20 percent lower than the same period last year.
"As a consequence of extensive media coverage precautionary product recalls in several countries, including New Zealand and China, the heightened concern about the safety of infant formula has resulted in a decline in imported infant formula sales in some markets," a Clover statement reads.
"Clover has a diversified sales strategy and supplies specialised encapsulated liquid ingredients to both local and international infant formula manufacturing companies. As a result of these market events, however, demand for Clover's ingredients has been adversely affected and as expected, sales have declined."
Earlier this month, Danone, the manufacturer of Karicare infant formula products, announced it's seeking full compensation from Fonterra for damages caused by the product recalls.
Thirty-eight tonnes of the whey protein concentrate, manufactured at Fonterra’s Hautapu plant in May 2012, was believed to have been contaminated by an unsanitary pipe, and the scandal, which unfolded in August, resulted in the resignation of managing director, Gary Romano, as well as two senior managers being place on leave, effective immediately.
However it was later uncovered that the bacteria found in the whey protein concentrate wasn't clostridium botulinum as originally thought, but was acutally identified as clostridium sporogenes, which doesn’t lead to any known food safety issue.