- Fonterra Co-Operative Group Ltd. said it would plead guilty to charges laid by the New Zealand government following a recall of baby-milk products last year associated with the dairy giant.
- Fonterra Ltd., which manufactures raw milk products for export, faces four charges including exporting products that failed to meet relevant food-safety standards. It was also charged with failing to notify government officials as soon as it discovered clostridium botulinum, a potentially deadly bacteria, in some of its products.
- The latest charges, laid in the Wellington District Court on Wednesday, carry a maximum penalty of half a million New Zealand dollars (US $425,000).
When a contaminated product gets into the food supply chain, the results are disastrous. Fonterra said last August that some of its products might contain clostridium botulinum, which can cause botulism. That triggered a global recall of hundreds of thousands of cans of baby formula across Asia, though it turned out to be a false alarm in that case. Fortunately, no lives were lost in this incident, as was the case in a recent listeria outbreak linked to dairy products made by Roos Foods. But there was major damage to the company's reputation.
Fonterra's slip also caused a major mess for French company Danone SA, which had incorporated Fonterra components into a baby formula it produced for the Chinese market. In January, Danone said it would no longer accept anything from Fonterra unless it can secure better food-safety guarantees. After failing to settle on compensation with Fonterra, it's taking its own legal action through an international arbitration panel in Singapore and New Zealand's High Court .