Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: Fonterra to ‘vigorously defend’ Danone claim

UPDATE: Fonterra to ‘vigorously defend’ Danone claim, units fall

By Paul McBeth

Jan. 9 (BusinessDesk) - Fonterra Cooperative Group, the world’s biggest dairy exporter, will “vigorously defend” a claim by French food processor Danone over last year’s recall of whey protein concentrate.

The Auckland-based company is working through Danone’s claim after negotiations for a commercial settlement failed. The French company will file papers in the High Court in Auckland today and has already served the arbitration papers to be heard in Singapore.

Fonterra “continues to be confident in its position and will vigorously defend any proceedings,” it said in a statement. “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.”

Danone will also terminate existing supply contract with Fonterra Cooperative Group and make “any further collaboration contingent on a commitment by its supplier to full transparency and compliance with the cutting-edge food safety procedures applied to all products supplied,” it said.

Units in the Fonterra Shareholders’ Fund fell 2.1 percent to $5.74 on news of the action.

Last August, Fonterra quarantined several batches of whey protein concentrate amid fears it was contaminated with a potentially dangerous form of the clostridium bacteria. The whey protein was ultimately cleared as a false alarm.

The French company put the cost of last year’s WPC 80 recall at 350 million euros when it announced its third-quarter results, while Auckland-based Fonterra recognised a contingent liability of just $14 million in its own accounts.

“It’s hard to know at this point how much of a claim by Danone is real and how much is negotiating tactics,” said Matt Goodson, managing director at Salt Funds Management. “At the moment this is a very news story driven equity market.”

Of the eight customers affected by Fonterra’s recall, the New Zealand company agreed to a commercial outcome with all of them except Danone, including extending supply contracts for the next 10 years and agreeing to volume increases.

In December, Fonterra chief executive Theo Spierings said he expected any court action would show the New Zealand company has no liability in its contract.

Salt Funds’ Goodson said he has been struggling with the fund as an investment as Fonterra has had to contend with an unfavourable product mix where rising prices in whole and skim milk powders haven’t been matched with manufactured products such as cheese.

“We really need to see a reversal with those markets for the fund to benefit,” he said.

Last month Fonterra cut its dividend forecast to 10 cents a share from 32 cents while keeping the milk price at $8.30 a kilogram of milk solids, even though its calculations showed the price should rise to $9 per kgMS.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news