Danone takes Fonterra to court

Earlier in August last year, a bacterial scare by New Zealand’s dairy company Fonterra led to the recall of baby milk formula products by other brand companies which used Fonterra ingredients. Danone was one of these companies.  Investigations later found Fonterra's warning to be a false alarm.(Read also: Fonterra responds to milk scare)As a result, Paris-based Danone is launching legal actions against Fonterra for compensation from the loss of sales. Reported on BBC News, Danone is also initiating legal action in the New Zealand High Court and arbitration proceedings in Singapore to seek compensation.According to Reuters, the recall resulted in Danone having to lower a full-year's target. The world's largest yoghurt maker did not say how much money it was seeking, but it has previously said it wanted full compensation for what it says were 350 million euros in lost sales following the recall of the company's Dumex and Karicare infant formula products, said the article."This affair illustrates serious failings on Fonterra's part in applying the quality standards required in the food industry," Danone said in a statement. Danone will also be terminating its contract with Fonterra.Meanwhile, Fonterra said it will “vigorously defend any proceedings" and the brand " has been in ongoing commercial discussions with Danone and is disappointed that they have resulted in legal action."