Danone has terminated its supply contract with Fonterra and has also formally launched legal proceedings as a result of last year's whey protein botulism scare.
Danone said in a statement that as a leading food company, it made food safety an absolute priority. The company also said it was “committed to working only with suppliers that share and respect the same demanding professional standards”.
“This affair illustrates serious failings on Fonterra’s part in applying the quality standards required in the food industry.
The news comes as Fonterra launches another voluntary recall after tests showed E.Coli may be present in some of its fresh cream products.
The company is recalling its 300ml and 500ml Anchor and Pams fresh cream, with 8,700 bottles distributed in New Zealand’s North Island to retail and foodservice outlets reportedly affected.
Danone said it was terminating its existing supply contract with Fonterra and making any further collaboration "contingent on a commitment by its supplier to full transparency and compliance with the cutting-edge food safety procedures applied to all products supplied to Danone".
Danone said is also initiating proceedings in the New Zealand High Court, as well as arbitration proceedings in Singapore “to bring all facts to light and to obtain compensation for the harm it has suffered”.
Danone recalled its milk formula products in New Zealand, Singapore, Malaysia, China, Hong Kong, Vietnam, Cambodia and Thailand, following the scare, and according to the company, the recalls had a significant impact on sales of its Baby Nutrition division's sales in Asia. Danone said it had also incurred non-current costs to cover recall procedures and efforts to boost sales.
Fonterra said it had been in ongoing commercial discussions with Danone and was “disappointed that they have resulted in legal action”.
“Fonterra will now work through the detail of Danone’s claims. It continues to be confident in its position and will vigorously defend any proceedings.
“Fonterra stands by its track record of having world-class food safety and quality standards, quality systems, and robust testing regimes across all its manufacturing facilities,” the NZ dairy giant said.
