Nestlé and Danone face scrutiny over infant formula toxin recall timeline

Investigations by European public broadcasters allege Swiss and French food groups delayed reporting contamination to regulators

Nestlé (NSRGY) and Danone (DANOY) are facing renewed regulatory and reputational pressure after a joint investigation by French, Belgian and Swiss public broadcasters alleged that both companies were slow to alert European authorities to the presence of a harmful toxin in infant formula products.

The inquiry, conducted by Radio France, RTBF and RTS and published on Tuesday, centres on cereulide, a heat-stable toxin produced by the bacterium Bacillus cereus that can cause vomiting and diarrhoea and carries particular risks for infants. The toxin was traced to arachidonic acid oil supplied by CABIO Biotech (688089.SS), a Chinese biotech group, and used by several formula manufacturers including Nestlé, Danone and privately held Lactalis.

Nestlé said the reports contained "inaccurate and misleading information", insisting the company had acted with full transparency and cooperated with authorities from the outset. The Vevey-based group said it had followed a rigorous protocol of assessment, traceability checks and product identification before initiating public recalls.

The Swiss company has previously disclosed that it first detected low cereulide levels in product samples in late November, ceased using all mixtures containing the supplier's oil once contamination was confirmed on 24 December, notified the supplier on 29 December, and launched public recalls from 5 January.

However, Radio France alleged that 838,000 cans of infant formula were held back from 26 December at Nestlé's factory in northern France and at other production sites. The broadcasters said products already in distribution channels or consumers' homes were not subject to an official recall or immediate notification to European authorities, despite regulations requiring prompt reporting when a health risk is identified. They also alleged that Nestlé conducted "silent" withdrawals in Austria and Germany from 24 December. Nestlé strongly disputed that characterisation.

Danone, which is listed in Paris, said the health and safety of infants was its "number one priority" and that it had fully cooperated with authorities, introducing precautionary recalls and additional quality checks as regulatory guidance evolved. The company is separately alleged to have withdrawn products from sale in January ahead of any public recall announcement.

The disclosures add to pressure on both groups at a sensitive moment. French prosecutors in Bordeaux and Angers have previously ruled out a causal link between the deaths of two infants and the recalled formula, though a third case remains under investigation. A fourth judicial inquiry, initially opened in Meaux, has been transferred to Paris, according to Radio France.

The episode risks amplifying scrutiny of food safety governance across the European Union's supply chain, particularly regarding manufacturers' obligations to report contamination promptly to the bloc's rapid alert system for food and feed.