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Will Kinder Ferrero survive the salmonella scandal?

Published by: Antonio Alagna
May 5, 2022 3:29 pm

On April 7th, Ferrero was accused by the French authorities of having caused a major outbreak of salmonellosis in several countries, such as France, Belgium, and the UK. 

Can Ferrero survive this scandal? How will it affect its brand and reputation in the short and long term?

What is Salmonella?

Salmonella Typhimurium is a bacterium that is mostly present in contaminated food of animal origin (eggs, meat, milk). It is one of the most frequent causes of food poisoning in Europe.

The typical symptoms of Salmonella infections are fever, diarrhoea and stomach cramps. The illness starts from six hours to six days after the contamination and can last up to seven days.

It mostly affects children and adults aged more than 65, and usually, patients recover completely from it. Still, some of them might suffer from long-term effects of it, such as persistent diarrhoea, arthritis, and pain when urinating.

History of the scandal

On January 7th 2022, British health authorities raised the alarm to inform citizens that several cases of Salmonella were identified all over the country. Subsequently, on February 17th 2022, French authorities were informed by their British counterparts about the ongoing epidemic. On April 2nd, they identified the products of Kinder Ferrero as the primary cause of this infection. Those products were produced in the plant of Arlon in Belgium, which manufactures 7% of all Kinder Ferrero products. Quickly the company withdrew from the market all snacks produced in that plant from October 2021 to January 2021, such as Kinder Surprises, Kinder Schoko-bons and Kinder Happy Moments.

So far, 142 cases of Salmonella have been identified in 9 countries (Belgium, France, Germany, Ireland, Luxembourg, Norway, Netherlands, UK, and Sweden) and children younger than ten years old were the most affected customers. 

Salmonella scandal hit Lactalis in 2018

At the beginning of 2018, the French company Lactalis was affected by a similar scandal as it had to recall 12 million boxes of powdered baby milk from 83 countries due to traces of Salmonella.

In this case, the incriminated plant was the Craon one in north-western France, and the company had to recall a full year of production of the brand's Picot and Milumel. Salmonella was found in this plant several times over a 5-year period. Several retailers were also involved in the scandal as they kept selling the contaminated products despite the official recall.

Consequences of the Lactalis scandal and possible results of the Ferrero one

The Lactalis outbreak affected 35 infants in France and many others worldwide. The company had to face hundreds of lawsuits and pay several hundred million euros in compensation. 

This sizable amount had negative repercussions for the company, but it did not lead to its closure of it due to its massive size. In fact, at the time, Lactalis' revenue was 17bn€, and it was a European leader in the dairy market, managing 246 factories in 47 nations and employing more than 15,000 people in France (75,000 all over the world)

Currently, Ferrero is smaller than it was Lactalis (12,7bn€ vs 17bn€), and it will likely pay a higher fine as more infants were involved (142 vs 35). But it will probably be big enough to sustain those costs as it is one of the largest food companies worldwide and has 32 manufacturing plants distributing its products in 170 nations

The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.

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