PARIS: French food group Danone said on Friday said it was weighing its compensation options after a false New Zealand milk botulism scare caused it to recall products in eight markets.
The recall will affect its third-quarter earnings in Asia.
On Wednesday, New Zealand said the scare was a false alarm and that tests indicating that products from dairy giant Fonterra contained the potentially fatal bug clostridium botulinum had been incorrect.
The crisis led to infant formula being pulled off shelves from China to Saudi Arabia.
For Danone, it translated into a recall of selected infant formula products in eight of its markets.
In Friday's statement, Danone said it welcomed the new findings, but noted that "these recalls have had a significant impact on the Baby Nutrition division's sales in Asia," adding it is "currently reviewing its recourse and compensation options."
Danone's chief financial officer Pierre-Andre Terisse said that because of the recalls, third-quarter sales in the unit would be down.
But, he said, "we are deploying action plans to restore sales in affected markets. Their success will enable Danone to meet its growth and margin targets for 2013."
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