Danone Awarded Damages From Fonterra After 2013 Product Recall -- Update
01 Dicembre 2017 - 03:02AM
Dow Jones News
By Ben Collins
WELLINGTON, New Zealand--French food giant Danone SA (BN.FR) has
been awarded 183 million New Zealand dollars (US$125 million) from
the world's largest dairy exporter, Fonterra Co-Operative Group
Ltd. (FSF.NZ), after an arbitration process in Singapore.
Danone issued a statement on Friday announcing that it had been
awarded damages, to be paid immediately by Fonterra, for costs
suffered as a result of a product recall in 2013.
Fonterra issued the recall as a precaution after saying some of
its whey protein concentrate might have put consumers at risk of a
potentially fatal botulism disease, though this turned out to be a
false alarm.
Danone canceled supply contracts and took legal action against
Fonterra in Singapore and New Zealand, seeking damages of more than
NZ$900 million, though New Zealand court action was deferred
pending the outcome of the arbitration in Singapore.
On Friday, Fonterra requested a trading halt, saying the outcome
of the arbitration was expected.
"We are disappointed that the arbitration tribunal did not fully
recognize the terms of our supply agreement with Danone, including
the agreed limitations of liability, which was the basis on which
we had agreed to do business," Fonterra Chief Executive Theo
Spierings said in a statement.
"The decision to invoke a precautionary recall was based on
technical information obtained from a third party, which later
turned out to be incorrect," he said.
Shares in the Fonterra Shareholders Fund, the listed arm of the
dairy co-operative, last traded at NZ$6.37, and were marginally
higher after being released from the trading halt.
Write to Ben Collins at ben.collins@wsj.com
(END) Dow Jones Newswires
November 30, 2017 20:47 ET (01:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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