Fonterra successful in bid to stop Danone legal action
New Zealand dairy giant Fonterra has been had success in with its recent attempts to stop the the legal action Danone is taking against it, over the botulism scare that rocked the New Zealand dairy industry last year.
This week Danone’s legal action against Fonterra has been put on hold, with the High Court saying arbitration in Singapore should happen first.
In August last year, Fonterra feared whey powder it produced and had ended up in infant formula, had been contaminated with botulism. The whey powder had been used by Nutricia for infant formula, which had to recall 67,000 cans of formula. Eight customers of Fonterra were affected by the scare, including Danone. Fonterra and Danone failed to reach an agreement over compensation and Danone launched a legal bid against Fonterra for losses it claims of over €200 million.
Fonterra said it would ‘vigorously defend itself against any claim’ and has now started proceedings to suspend the legal action. Its application will be heard in June in the High Court in Auckland, New Zealand.
Fonterra was already fined NZ$300,000 (€188,000) over how it handled last year’s botulism scare by a court in New Zealand this year.
That case was taken by the Ministry for Primary Industries (MPI) in New Zealand. Fonterra raised the alarm last August and recalled some 38 tonnes of whey protein concentrate with concerns a bacteria in the whey protein concentrate would cause botulism.