Toxin in baby milk: how an incident in France shook global manufacturers
27 January 22:02
Danone shares fell sharply after France expanded a precautionary recall of baby food due to concerns about possible toxin contamination. The situation affected four manufacturers at once, including the world’s largest players in the dairy and baby food market.
This was reported by Reuters, according to "Komersant Ukrainian".
Which companies are affected
Products from the world’s three largest dairy groups were recalled:
- Nestlé (Switzerland),
- Danone (France),
- Lactalis (France, a private company),
as well as the French company Vitagermine, which was the first to announce the expansion of the recall.
This concerns powdered infant formula, which may contain cereulide, a toxin produced by the bacterium Bacillus cereus.
Market reaction
The news immediately affected stock prices:
- Danone:
shares fell 6% at the start of trading and closed down 2.3% — the lowest level since January 2025. - Nestlé:
the morning drop reached 3% (a five-month low), but at the end of the session, shares lost 0.9%.
Analysts note that even a precautionary recall without confirmed mass poisoning can seriously affect the value of companies in the baby food sector.
What is the danger
Cereulide is a heat-resistant toxin that can cause nausea and vomiting, and in some cases, serious complications. It was found in an ingredient used in production.
The Irish Food Safety Authority reported that the toxin was found in arachidonic acid produced in China.
The French Ministry of Agriculture stated that the ingredient
- originated in China
- was sold by a Dutch company,
but the specific names of the suppliers are not being disclosed.
Investigation and human factor
French investigators are checking whether there is a link between the deaths of two infants and the recalled products. At this stage, the causal link has not been officially confirmed, but the fact that an investigation is underway has significantly increased tension surrounding the situation.
Possible financial consequences
According to Barclays analysts, the financial impact could be asymmetrical:
- for Danone — up to €100 million in the worst-case scenario,
- for Nestlé — up to CHF 1 billion (over $1.29 billion).
Thus, the total potential losses for the sector could exceed $1 billion.
In early January, Nestlé already recalled batches of SMA, BEBA, and NAN products across Europe due to similar concerns about toxins.
