28 Jul 2014

Danone's infant formula sales falling

7:41 am on 28 July 2014

The French food group, Danone, has reported a 13.6 percent drop in infant formula sales in the June quarter as a result of Fonterra's botulism scare.

The latest sales decline follows a near 12.6 percent fall in the March quarter.

Danone said it was working to get its sales in China, the most affected market, back on track through product launches and brand extensions.

However, it said it would favour solid, lasting growth over speed. In all, eight of Danone's markets in Asia were affected by the botulism scare.

Earlier this month, Danone's legal action against Fonterra was put on hold by the High Court.

The court said arbitration proceedings in Singapore, which the French company has also set in train to get compensation, should happen first.

Danone wants compensation for both lost sales and other costs and for damage to its reputation.

It estimates it lost 370 million euros in sales in 2013 and that it cost it a 105 million trading loss as well as 201 million in other costs such as product recall.