Danone awarded $125m damages from Fonterra over botulism scare
An arbitration tribunal has ordered New Zealand dairy giant Fonterra to pay Danone of France $125 million for recall costs stemming from a 2013 food scare.
The recall was made out of concerns, which proved later to be untrue, that some Fonterra products supplied to four Danone Nutricia baby formula plants in Asia were tainted by botulism. Danone recalled products from eight regional markets.
Fonterra said that it was disappointed over the ruling by an arbitration tribunal in Singapore. It says its supplier agreement with Danone made it not liable for the recall costs.
Danone issued a statement welcoming the decision. The French company launched a €630m legal claim against Fonterra in the New Zealand High Court, alleging the milk supplier breached New Zealand’s Fair Trading Act. The case was halted while the arbitration proceedings took place but now could be restarted.
Fonterra is a cooperative owned by more than 10,500 farmers and enjoys a near monopoly on New Zealand milk. It is the world's biggest dairy exporter.