WELLINGTON: French dairy giant Danone said it will sue New Zealand farming cooperative Fonterra for compensation over a botulism scare last year that forced global recalls of baby formula.
Danone said the scare last August, which turned out to be a false alarm, had harmed the company and it was launching legal action seeking redress in the New Zealand High Court.
“This affair illustrates serious failings on Fonterra’s part in applying the quality standards required in the food industry,” Danone said in a statement issued by its Paris head office.
Danone did not reveal how much compensation it wanted, saying the figure was a matter for the courts to determine. Howeer, the company estimated late last year that the crisis had cost it 300 million euros ($407 million).
The company also said it had canceled its supply contract with Fonterra, a grouping of about 13,000 New Zealand farmers that accounts for about a third of the world’s dairy exports.
It did not say how much the supply contract was worth.
Fonterra said it will “vigorously defend” the legal action and was disappointed Danone had abandoned commercial discussions in favor of going to the courts.
“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,” it said in a statement.
Fonterra has denied any legal liability for Danone’s losses and said in its 2013 accounts released in September that it had set aside just NZ$14 million ($11.6 million) to cover any claims arising from the crisis.
The scare erupted in August when Fonterra announced a whey protein used in baby formula and some other products had tested positive for a bacteria linked to botulism, which can cause paralysis or death.
The scare led to infant formula being pulled off shelves from China to Saudi Arabia before subsequent tests determined the bug was actually another, non-toxic, bacteria strain.
Most of the recalled formula tins were Danone brands, although US-based Abbott Laboratories also recalled product in parts of Asia, estimating in September that the disruption would cost it $90 million in the final quarter of 2013.
Abbott has not announced any legal action against Fonterra.
The episode dented New Zealand’s reputation for producing the gold-standard formula that commands top prices in lucrative Asian markets.
It also revived memories of a 2008 scandal when six children died and another 300,000 fell ill in China after a local company part-owned by Fonterra illegally laced milk with the chemical melamine.
Danone seeks Fonterra compensation over botulism scare
Danone seeks Fonterra compensation over botulism scare
Closing Bell: Saudi main index extends gains as market opens wider to foreign investment
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Monday, gaining 153.61 points, or 1.38 percent, to close at 11,321.09.
The total trading turnover of the benchmark index was SR5.85 billion ($1.56 billion), as 207 of the listed stocks advanced, while 55 retreated.
The MSCI Tadawul Index increased, up 21.20 points or 1.41 percent, to close at 1,524.18.
The Kingdom’s parallel market Nomu gained 278.13 points, or 1.17 percent, to close at 24,013.03. This comes as 43 of the listed stocks advanced, while 29 retreated.
The best-performing stock was Saudi Pharmaceutical Industries and Medical Appliances Corp., with its share price surging by 7.26 percent to SR28.94.
Other top performers included Rasan Information Technology Co., which saw its share price rise by 6.51 percent to SR144, and Knowledge Economic City, which saw a 6.25 percent increase to SR13.09.
On the downside, the worst performer of the day was Najran Cement Co., whose share price fell by 2.11 percent to SR6.49.
Almasane Alkobra Mining Co. and Saudi Cable Co. also saw declines, with their shares dropping by 2 percent and 1.88 percent to SR103.10 and SR166.80, respectively.
On the announcement front, Riyad Bank has announced its annual financial results for 2025, with the total income from special commission of financing reaching SR24.1 billion, while net income from special commission of financing amounted to SR12 billion.
In a statement on Tadawul, the bank said: “Net income increased by 11.7 percent mainly due to an increase in total operating income and a decrease in total operating expenses.”
The bank further noted that the rise in total operating income was primarily driven by increased revenue from fees and commissions, trading activities, special commissions, gains on non-trading investments, and other operating sources. This growth was partially tempered by declines in exchange and dividend income.
“Net provision of expected credit losses and other losses decreased by 15.8 percent due to a decrease in impairment charge of credit losses and impairment charge for other financial assets, partially offset by an increase in impairment charge for investments,” it added.
RIBL’s share price closed at SR18.18 on the main market, marking a 1.43 percent increase.
