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Fonterra Could Face Legal Challenge From Danone Over an Infant Formula Contamination Scare

Fonterra, a New Zealand-based dairy co-operative, has said that it could face a legal challenge from French dairy major Danone over an infant formula contamination scare.

The company had discovered a potentially fatal ingredient in a Danone product line that was distributed at several multinational firms during August 2013.

However, later it was found that the bacteria discovered in the ingredient was less harmful.

Danone is seeking around $476m in compensation from Fonterra, following the recall of its infant formula products across Asia and New Zealand.

Commenting on the issue, Fonterra CEO Theo Spierings was quoted by Reuters as saying, "We're still in talks (with Danone).

"I put a commercial proposition on the table at the end of October and I haven't heard back on that proposition."

"If their counterproposal is commercial, I would of course entertain a commercial discussion. If their reply is legal, then we would have a different discussion," Spierings added.

Meanwhile, Fonterra has allotted around NZ$14m ($11.4m) to manage the recall-related issues.

Source: http://www.drinks-business-review.com/news/fonterra-to-face-legal-battle-over-infant-formula-contamination-scare-031213-4139538
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Fonterra Could Face Legal Action From Danone Over Baby Formula Recall