Overseas demand for Nutricias formula slow to recover after Fonterra scare

Overseas demand for Nutricia's formula slow to recover after Fonterra scare

Nutricia, an infant formula unit of Danone, has admitted jobs could go across Australia and New Zealand in the wake of the Fonterra botulism contamination scare that hit the business.

The company, a customer of Fonterra, recalled products this summer after the New Zealand dairy giant said a batch of whey protein concentrate could have been contaminated with a chemical that could cause botulism.

The scare turned out to be a false alarm, although Danone is pushing for compensation from Fonterra for lost sales.

Nutricia said consumers, particularly in New Zealand, were turning back to the business after the scare. However, the company said demand overseas had been slow to respond and it revealed it was looking at ways to reduce costs.

"Whilst there have been welcome indications of consumer confidence and trust returning to Nutricia, along with signs of recovery in the domestic market of NZ, overseas demand remains slow to respond. As a result, Nutricia ANZ has entered into a consultation process with a number of its employees regarding a proposed restructure of its Australia [and] New Zealand operations," Nutricia said.

"All options are being considered to reduce costs which includes the possibility of reducing the workforce across Australian and New Zealand sites. Nutricia does not take these decisions lightly, and has committed to keeping any job losses to a minimum. We will have wide ranging discussions with the workforce and take on any ideas and suggestions they might have to best reduce our costs and safeguard the business for future growth. Wherever possible Nutricia will undertake to redeploy employees within the Danone group."