Three of the world’s largest dairy companies are recalling and blocking batches of infant milk formula after a contamination scare that began with Nestle widened on Wednesday to French groups Danone and Lactalis.
The recalls highlight how a single compromised ingredient can spread through the tightly regulated infant nutrition sector, triggering swift action from regulators and companies keen to avoid reputational harm and protect market share in lucrative regions such as China.
Read more: China Urges Nestlé to Work Quickly on Baby Formula Recall
Nestle recalled batches of infant nutrition products in dozens of countries earlier this month, due to possible contamination with cereulide, a toxin that can cause nausea and vomiting.
A judicial inquiry in France is underway into whether there is a link between the death of a baby and the Nestle milk. The farm ministry said the results are expected in about 10 days.
The Singapore Food Agency on Saturday ordered the precautionary recall of a batch of Danone’s Thai-origin Dumex Dulac 1 and Nestle’s Swiss-origin NAN HA1 SupremePro after detecting cereulide.
Privately-owned Lactalis said on Wednesday its nutrition unit was recalling batches of baby milk in 18 countries, due to the presence of cereulide in an ingredient sourced from a supplier.
“All infant milk producers in France and internationally are likely to have been affected by deliveries of non-compliant raw materials from the same manufacturer, which led to recalls by Nestle and Lactalis,” a farm ministry official told Reuters.
‘Share Price Reaction Seems Overdone’
Danone’s shares were down around 8.3% on Wednesday, touching their lowest level since February 2025 in early trade. The company said it was working with Singapore’s regulator and that all controls confirmed its products were safe, with no irregularities found relating to Bacillus cereus, the bacteria that can produce cereulide.
The weakness over the last week has been driven by broker downgrades citing foreign‑exchange headwinds, slower industry growth and falling Chinese birth rates that are weighing on infant formula sales, said Sagar Thanki, an investment analyst at Danone investor Guinness Global Investors.
The share price drop on Wednesday was due to the Singapore recall, Thanki added.