Blog: Hannah AbdullaRepurcussions of botulism scare continue to impact Fonterra

Hannah Abdulla | 27 March 2014

It's been a tough last year for Fonterra  and the repurcussions don't appear to have stopped. The firm reported a 53% loss in profits for the first six months of its financial year yesterday attributing the losses to margins being squeezed by higher commodity prices.

Following the legal tie-up with Danone over last year's Botulism scare, Fonterra has set aside NZ$11m (US$9.5m) in expected legal fees. Earlier this month Fonterra accepted four counts of food safety violations related to the incident which saw Danone axe its supply contract with the firm. 

According to Danone, the recall of the concentrated whey powder last August resulted in lost sales of EUR350m (US$476m).

Fonterra said in the report it was "working through the details of Danone's claim" and would "vigorously defend its position".

The $11m it has provided it says represents "the maximum contractual liability to Danone", though it is lower than the NZ$14m provision it originally announced at the end of last year.

Sectors: Dairy

Companies: Danone, Fonterra

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