The management of contaminated infant formula recalls brings Nestlé and Danone back into the spotlight, while new journalistic investigations and previous analyses raise doubts about the timing of interventions, including notifications to authorities, production blocks, and products remaining in distribution channels in several countries.
THE INVESTIGATIONS AND ACCUSATIONS OF DELAY
According to a joint investigation by Radio France, RTBF and RTS, Nestlé allegedly delayed alerting European authorities about the presence of cereulide, a toxin capable of causing vomiting and diarrhea and considered particularly risky for infants.
The substance was detected in an ingredient supplied by the Chinese company CABIO Biotech and also used by Danone and Lactalis, a circumstance that led to recalls in over 65 countries and widespread attention from authorities and consumers.
The same investigations, states The Independent, also hypothesized that products already placed on the market remained in distribution channels or consumers’ homes without immediate communication to the competent authorities, despite rules requiring prompt reporting in the presence of health risks.
RECALLS, BLOCKS AND PRODUCTS NOT IMMEDIATELY WITHDRAWN
Radio France reported that about 838,000 cans of infant formula were blocked since December 26 at Nestlé’s plants in France and other production sites.
According to the same reconstructions, some recall operations occurred without immediate public communication in Austria and Germany as early as December 24, a circumstance contested by Nestlé.
ONGOING JUDICIAL INVESTIGATIONS
Currently, French judicial authorities have ruled out a link between the deaths of two infants and the recalled products, while a third case remains under examination. An investigation opened in Meaux, according to Radio France, has been transferred to Paris.
NESTLÉ AND DANONE’S POSITION
Nestlé, according to Reuters, rejected the accounts describing the accusations as “inaccurate and misleading,” asserting that it has operated transparently and in collaboration with authorities from the start. According to reports, the company followed a detailed internal process that included risk assessments, traceability checks, and identification of involved products before proceeding with public recalls.
The company also indicated that it detected the first low levels of cereulide at the end of November, stopping the use of blends containing arachidonic acid oil from the supplier after contamination was confirmed on December 24. The supplier was informed on December 29, while sample analyses continued until January 3, with recalls starting from January 5.
Danone stated that infant health is the top priority and emphasized cooperation with authorities and the adoption of precautionary measures as guidance was updated.
THE IMPACT ON NESTLÉ’S SALES
An analysis by the Financial Times, published about a month before the most recent investigations, had already highlighted significant economic effects for Nestlé, with an estimated 0.9% impact on quarterly sales growth attributed to the recalls. Specifically, the nutrition segment recorded a 3.9% decline, while coffee growth of 9.3% partially offset losses, contributing to overall sales growth of 3.5%.
The same report indicated effects for Danone as well, with a 4.3% decline in the nutrition division in Europe, the Middle East, and Africa during the same period.
