Toxin in infant formula: how an incident in France shook global manufacturers
27 January 22:02
Danone shares plummeted 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 markets.
This was reported by Reuters, as cited by "Komersant Ukrainian".
The recall includes products from the world’s three largest dairy groups:
- 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.
The products in question are 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 by the end of the session , shares had lost 0.9%.
Analysts note that even a precautionary recall without confirmed mass poisoning can seriously impact 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 detected 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 distributed by a Dutch company,
but the specific names of the suppliers are not being disclosed.
Investigation and the Human Factor
French investigators are examining whether there is a link between the deaths of two infants and the recalled products. At this stage, a causal link has not been officially confirmed, but the very fact of the investigation has significantly heightened tensions surrounding the situation.
According to Barclays analysts, the financial impact could be asymmetrical:
- up to €100 million for Danone in the worst-case scenario,
- for Nestlé —up to 1 billion Swiss francs (over $1.29 billion).
In early January, Nestlé had already recalled batches of SMA, BEBA, and NAN products across Europe due to similar concerns about toxins.
