Danone and Fonterra entered their first courtroom scuffle yesterday over what’s likely to be a long, drawn-out battle stemming from last year’s botulism scare.
Yesterday’s hearing related to an application by the media to access court files. Justice Brendan Brown allowed the media to attend the hearing, including NBR, but has not allowed the media to publish the substance of the arguments.
Fonterra opposes media access, while Danone does not. Justice Brown reserved his decision.
Danone has filed a statement of claim in the New Zealand High Court and Fonterra has since asked to suspend proceedings. Fonterra says it will "vigorously defend any proceedings." It has yet to file a statement of defence.
Danone is also pursuing arbitration proceedings in Singapore.
In August last year Fonterra issued an alert concerning a possible contamination of some ingredients supplied to Danone. Tests later revealed it was a false alert.
“This affair illustrates serious failings on Fonterra’s part in applying the quality standards required in the food industry,” according to a recent statement by Danone.
In January, Danone announced it was terminating its existing supply contract with Fonterra and any further business rests on Fonterra’s commitment “to full transparency and compliance with the cutting-edge food safety procedures applied to all products supplied to Danone.”
Danone also recently released its 2013 results, which says its Early Life Nutrition division continues to be significantly affected by fall-out from the Fonterra affair. Danone attributes a €200 million ($NZ326.22 million) loss in sales in the fourth quarter for that division alone.
At the High Court At Auckland, Queen’s counsel David Goddard represented Danone and Queen’s counsel Alan Galbraith represented Fonterra.
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