By Rebecca Howard
WELLINGTON, New Zealand--New Zealand dairy giant Fonterra
Co-operative Group Ltd. (FCG.NZ) confirmed Wednesday that it is in
a dispute resolution process with Danone SA (BN.FR) following a
recent global recall involving one of its dairy products.
In early August, Fonterra said three batches of one of its dairy
products, whey protein concentrate, might contain harmful bacteria.
The news led to product recalls in several countries including
China and New Zealand, and affected Danone and other companies.
While subsequent testing indicated that the organism wasn't in
fact harmful, the New Zealand government and Fonterra are holding a
series of investigations into the incident and the way it was
handled.
The discussions between Fonterra and Danone had been
confidential with a view to reaching a mutually acceptable
commercial outcome, Fonterra said Wednesday. It confirmed that
discussions remain ongoing "but strongly denies any legal liability
to Danone in relation to the recall."
Danone officials weren't immediately available for comment. The
company said in late August that the recall of various of its
infant formula products in eight Asian markets had had a
"significant impact" on the group's Asian baby nutrition
division.
Write to Rebecca Howard at rebecca.howard@wsj.com
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