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

 


Nutricia NZ profit slides 97% following Fonterra scare

Nutricia NZ profit slides 97% in 2013 year disrupted by Fonterra recall

By Suze Metherell

June 12 (BusinessDesk) - Nutricia, the New Zealand infant formula unit of French food maker Danone, posted a 97 percent drop in profit in 2013, a year that saw sales disrupted by Fonterra Cooperative Group's false alarm botulism scare last August.

Profit fell to $1.99 million in the year ended Dec. 31, from $61.1 million a year earlier, according to the company's financial statements lodged with the Companies Office. Sales fell 15 percent to $318.2 million while cost of sales rose 8.1 percent to $265 million. Globally, Danone's early life nutrition unit reported annual revenue growth of 0.1 percent to 4.26 million euro, as a 13 percent drop in second-half sales offset a 14 percent gain in the first half.

Infant formula sales for Danone's Nutricia unit plunged last August as it recalled infant formula from New Zealand, China, Singapore, Malaysia, Hong Kong, Vietnam, Cambodia and Thailand after Fonterra quarantined several batches of whey protein concentrate on fear it was contaminated with a potentially dangerous strain of clostridium bacteria, capable of causing botulism. The strain was ultimately shown to be harmless.

"The botulism scare caused serious damage to Danone Nutricia's business," which was reflected in global sales, a spokeswoman for Danone said in an email to BusinessDesk, declining to make any specific comment on the New Zealand unit.

In January, Danone terminated its supply contract with Fonterra and started legal action against New Zealand's largest exporter, seeking compensation over the recall, and served arbitration papers to be heard in Singapore.

"The early life nutrition division continues to be significantly affected by fall-out from the false safety alert triggered by Fonterra in August 2013," Danone said at the time of its full-year results in February. "Recovery plans to get sales back on track are being deployed in the countries affected and are having some impact, with the pace of recovery varying from market to market. In China and in Australia-New Zealand in particular, the trend is very gradual, as anticipated when third-quarter sales were announced."

Nutricia's financial statements for the year ended Dec. 31, 2012, lodged with the Companies Office, say in a note on events post balance date that the company's total value of inventory affected by the recall was $25.7 million.

Despite the profit drop, the local unit still paid a dividend of $72.3 million in 2013, up from $34.1 million a year earlier.

Of the eight customers affected by the recall the dairy exporter has agreed to a commercial outcome with all of them except Danone. In Januaru, Fonterra said it would "vigorously defend" itself against the Danone claim.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news