4 Oct 2013

Danone reveals scale of compensation claim

1:50 pm on 4 October 2013

Dairy giant Fonterra is making no comment after a French company revealed how much compensation it is seeking over the botulism scare in August.

International food giant Danone says it will be claiming at least €200 million ($NZ328 million) from Fonterra, after having to recall a large amount of its milk products because of the contamination alert.

Details of a dispute notice issued by Danone to Fonterra are now emerging, with the Paris based company telling Bloomberg news it is "determined" to be "fully compensated for damages".

It says the €200 million is "part" of its claim, describing it as an estimate of the immediate costs of the recall.

Fonterra has not commented on the figure on Friday, saying only that discussions with Danone, the parent company for infant formula company Nutricia, to resolve the dispute are "continuing and remain confidential".

A spokesperson for the Minister of Primary Industries also had no comment, saying it is an issue for the companies.

Fonterra has set aside $NZ14 million to cover liabilities flowing from the contamination alert and product recall, but anticipates that the cost could go higher.

While the co-operative is denying any legal liability to Danone, the French company says it's entitled to full compensation after having to withdraw milk formula products from China and other Asian markets.

Nutricia also recalled 67,000 cans of infant formula in New Zealand and is now on a drive to reassure its customers about the safety of its products. Medical director Gregg Ward says the company is also putting extra controls on its suppliers.