2 Oct 2013

PM staying out of Fonterra-Danone dispute

6:28 pm on 2 October 2013

Prime Minister John Key is staying out of a commercial dispute between Fonterra and French dairy company Danone, which has been prompted by the botulism scare.

Fonterra has confirmed it is in a dispute resolution process with the company - the parent company of Nutricia, which had to recall its infant formula products as the result of the whey protein scare.

Fonterra ordered a precautionary recall of some whey protein concentrate on 3 August after test results indicated some batches may have been contaminated with botulism-causing bacteria. The recall was later lifted after further tests gave the all-clear.

The dairy giant said discussions with Danone had been confidential with a view to reaching a mutually acceptable result.

Mr Key said it would be inappropriate for him to comment, other than what he told Danone at a meeting in Paris.

"New Zealand is taking all of the inquiries that have been undertaken very seriously," he said.

"New Zealand has a world-class judicial system and if they wish to test their rights in the court, they can have full confidence that the New Zealand judiciary will treat them in a manner that they would expect to be treated."

Fonterra has confirmed that dispute resolution talks with Danone are continuing, but strongly denies any legal liability to Danone in relation to the recall.

Danone makes cereals and baby foods, as well as producing fresh dairy products and yoghurts.