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FONTERRA SAYS IT will 'vigorously defend' legal proceedings which have been formally initiated by Danone.
This action by Danone follows the whey protein concentrate precautionary recall initiated by Fonterra in August last year.
Fonterra has been in ongoing commercial discussions with Danone and is disappointed that they have resulted in legal action, it says in a statement.
"Fonterra will now work through the detail of Danone's claims. It continues to be confident in its position and will vigorously defend any proceedings," it says.
"Fonterra stands by its track record of having world-class food safety and quality standards, quality systems, and robust testing regimes across all its manufacturing facilities."
Various news sources report that Danone is suing Fonterra in the High Court in Auckland and seeking arbitration in Singapore. Danone previously claimed it lost an estimated $450m as a result of the precautionary recall of infant formula containing whey protein concentrate supplied by Fonterra. The whey protein concentrate was suspected of harbouring a botulism causing bacteria but this was a false alarm.
News sources also report that Danone has cancelled its supply contract with Fonterra and is making any further contracts with Fonterra contingent on "full transparency" and respect of safety procedures the company requires of suppliers.
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