Fonterra in dispute resolution with Danone

Following its recent whey contamination scandal, dairy giant Fonterra has confirmed it's in a dispute resolution process with Danone.

Danone owns Nutricia, the manufacturer of the Karicare infant formula which was the subject of the  the health scare and was subject to extensive recalls in a number of countries.

A statement issued by ASX reads, "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.

"Fonterra confirms that the discussions remain ongoing but strongly denies any legal liability to Danone in relation to the recall."

According to the NZ Herald, Danone institated the dispute resolution after meeting with New Zealand Prime Minister John Key in Paris late last month to discuss Fonterra's refusal to help ease the financial damages Danone suffered as a result of the scare.

In August Fonterra issued a warning that the whey protein in its baby formula products and sports drinks may contain a bacterium that can cause botulism.

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 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.

 

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