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

 


Danone reveals local cost of Fonterra infant formula recall

Danone’s Nutricia recalled $25.7 mln of infant formula in Fonterra food scare

By Paul McBeth

Jan. 23 (BusinessDesk) - French dairy giant Danone’s Nutricia unit recalled $25.7 million of infant formula from the New Zealand market when it was caught up in Fonterra Cooperative Group’s false food alarm last year, according to financial statements for its local operation.

Nutricia’s statements for the year to Dec 31, 2012, lodged with the Companies Office yesterday, say the company announced “a precautionary recall in the New Zealand domestic market of particular batches of products with the Karicare and Karicare gold brands”. “Products manufactured for export to other group entities” were also caught up.

The total value of inventory affected by the recall was $25.7 million, the statements say in a note on events that occurred after balance date. Nutricia branded infant formula products were pulled off shelves in other markets, including Australia.

Earlier this month Danone severed its supply contract with Fonterra and filed proceedings in the High Court in Auckland seeking compensation over the recall and served arbitration papers to be heard in Singapore. 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.

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.

Of the eight customers affected by the recall, all but Danone agreed commercial settlements, 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, and the company has said it will “vigorously defend” Danone’s claim.

The Nutricia accounts show the New Zealand unit boosted annual profit 69 percent to $61.1 million in calendar 2012, with a 59 percent jump in revenue to $373 million. It fattened its gross margin to 34 percent in the year from 31 percent in 2011.

As at Dec. 31, 2012, Nutricia’s inventory grew to $60.6 million of stock from $27.3 million a year earlier, with a largely even split between finished goods and raw materials.

Nutricia paid a dividend of $34.1 million in 2012, more than four times the near $8 million return it made in 2011. Post-balance date, the unit paid a further dividend of $72.3 million in April last year.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news