French food giant Danone has acquired two New Zealand dairy firms, aiding its supply route into the Asian market.
Through its Nutricia subsidiary in New Zealand, Danone has bought milk processing and packaging companies from the Sutton Group and Gardians.
The deal includes Sutton’s infant milk formula blending, packing and can-forming activities, and Gardians’ 20,000 spray-drying facility near Balclutha, South Island. The transaction value has not been disclosed and the deal is subject to regulatory approval.
All of this comes against the backdrop of Danone's legal action against Fonterra, who they are suing for $500 million in compensation for damage to its reputation following last year's botulism scare.
Danone's net profit slumped 15% in 2013 after a food safety warning by key supplier Fonterra last year forced the group to launch a massive recall in Asia.
"This transaction will provide Nutricia with a large milk drying capacity, along with a long-term fresh milk supply access," Danone said in a statement regarding its new purchases.
"It will also add an infant formula blending and packing facility to Nutricia's existing operations platform."
© 2014 - European Supermarket Magazine by Enda Dowling
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