New Zealand infant formula acquisitions 'key to restoring...trust': Nutricia ANZ

16-Sep-2014 - Last updated on 17-Sep-2014 at 12:04 GMT

Nutricia Australia New Zealand’s (Nutricia ANZ) acquisition of Kiwi infant formula businesses the Sutton Group and Gardians is “key to restoring" consumer confidence lost as a result of the 2013 botulism scare.

New Zealand Prime Minister John Key joined Nutricia ANZ managing director Corine Tap in Auckland earlier today to launch its simultaneous mergers with Auckland-based the Sutton Group and Balclutha-based Gardians.

Nutricia ANZ, a subsidiary of French dairy giant Danone, announced in April 2014 that it had agreed to buy the spray drying capabilities of Gardians and the Sutton Group's infant formula blending, packing, and can-forming facilities.

Gardians and the Sutton Group, which both hold China Certification and Accreditation Administration (CNCA) export approval, will continue to supply products to Australia, New Zealand, China and South East Asia, said Nutricia ANZ in a statement.

It also plans to double the capacity of the plants to "meet the considerable growth expectations."

Celebrating its absorption of the businesses, Tap said the investments would boost its existing operational presence in the country, drive economic growth, and reinforce its "long-standing New Zealand heritage."

"We recognized the potential, and worked with the Sutton Group and Gardians to develop a partnership and build a platform in New Zealand that will have a lasting legacy," said Tap.

The Nutricia ANZ statement added that the deals would help repair the "major impact" of the 2013 botulism scare.

"New chapter"

"This acquisition is key to restoring domestic and international trust in New Zealand's brand, and promoting the quality of the New Zealand dairy industry," the statement said.

In August 2013, Nutricia ANZ pulled 67,000 tins of Karicare and Karicare Gold brand infant formula from shelves in New Zealand as a precaution after Fonterra warned it and seven other customers that three batches of whey protein concentrate (WPC80) potentially contaminated with botulism-causing Clostridium botulinum had entered the supply chain.

Tests later revealed that the bacteria found were Clostridium sporogenes, a non-toxic Clostridium strain.

In the first draft of its 2013 full-year results, Nutricia said that the total value of inventory affected by the precautionary recall was NZ$25.7m (US$21m, €16.2m).

“A year on from the Fonterra botulism false alarm, Danone Nutricia is confirming its commitment to New Zealand, and the mums, dads and carers that stood by the company during the crisis," an additional fact sheet provided by Nutricia ANZ today said.

“The acquisition heralds a new chapter for Danone Nutricia and demonstrates its confidence in the New Zealand dairy industry.”