Fonterra and Danone in court

Last updated 12:51 05/03/2014

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Dairy giants Fonterra and Danone have had their first High Court battle in relation to the fallout of last year's botulism false alarm.

A hearing in the High Court in Auckland this morning dealt with an application by media organisations for access to court documents relating to the case.

French food company Danone said in January that it had cancelled its supply contract with Fonterra and was launching legal action against the New Zealand dairy co-operative in a bid to win more than €300 million (NZ$492m) in compensation.

The move follows a scare in August last year when Fonterra issued a milk-powder contamination warning that later tests found was a false alert.

Danone Asia Pacific Holdings had since filed a statement of claim with the High Court at Auckland.

Fonterra parent company, Fonterra Co-operative Group, opposed media applications to access the document filed by Danone.

Today's hearing into whether the media should be allowed access to Danone's statement of claim was heard by Justice Brendan Brown.

Justice Brown suppressed everything discussed in this morning's hearing. He also reserved his judgment on whether the media would be granted access to the court file.

Danone spokeswoman Eliza Newton said in January the company had identified an initial €300m in anticipated business losses for the 2013 financial year.

The losses were incurred when Danone had to recall baby-formula product in eight markets after the botulism alarm.

Fonterra said in January it would "vigorously defend" the Danone proceedings.

The company said it was "disappointed" that ongoing commercial discussions with Danone had resulted in legal action.

The Kiwi dairy giant said at the time it stood by its track record of having world-class food safety and quality standards, quality systems, and robust testing regimes across all its manufacturing facilities.

During the Fonterra Shareholders' Fund annual meeting in December, Fonterra chief executive Theo Spierings said that legally, Fonterra did not have any liability if the dispute went to court.

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