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France's Danone ends Fonterra contract, launches court action
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11183560
Food giant Danone's decision to dump Fonterra as a supplier and launch legal action over last year's contamination scare is an effort to boost its potential compensation amount, an analyst says.
Danone announced today it had launched legal proceedings against New Zealand diary group Fonterra and has ended its supply contract with firm.
The Paris-based company is initiating proceedings in the High Court here and arbitration proceedings in Singapore "to bring all facts to light and to obtain compensation for the harm it has suffered," over the dairy giant's whey protein concentrate recall.
Danone - which is the parent company of infant formula manufacturer Nutricia - put the cost of last year's recall at 350 million euros ($575 million) when it announced its third-quarter results, while Fonterra recognised a contingent liability of just $14 million in its own accounts.
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