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Danone Claims at Least $272 Million From Fonterra Over Recall

Oct. 3 (Bloomberg) -- Danone said it is claiming at least 200 million euros ($272 million) in compensation from Fonterra Cooperative Group Ltd. after having to recall milk formula products because of a contamination scare.

The maker of Activia Yogurt sent a notice of dispute to Fonterra on Sept. 24 “to give both parties a chance to reach an amicable agreement prior to any litigation,” Paris-based Danone said today in an e-mailed statement. The company said it is “determined that it should be fully compensated for damages” and regards food safety as “a non-negotiable prerequisite.”

A figure of 200 million euros “is part of what Danone is asking to Fonterra as a compensation,” the French food maker said in the statement. “They represent an estimation of the immediate costs caused by the recall.”

Danone issued a recall of milk formula products in eight markets in August after Fonterra said the items might have been affected by a contaminated whey protein ingredient. The scare proved to be a false alarm.

Fonterra said in an Oct. 2 statement that it “strongly denies” any legal liability to Danone in relation to the recall, adding that discussions between the companies continue.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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