Toxin in infant formula. Nestlé, Danone and Lactalis face losses of more than $1 billion

Shares of Danone and Nestlé fell sharply on Monday after French company Vitagermine expanded a recall of infant formula, Reuters writes.

The recall is due to fears of contamination of the formula, which has already affected four manufacturers and threatens to cause total losses exceeding $1 billion.

Shares of the French company Danone fell 4% to €64.8 per share during intraday trading, reaching their lowest level since January 2025.

Shares of the Swiss group Nestlé fell 1.8% to a four-month low. After the company recalled batches of products in dozens of countries in early January, the decline in Nestlé shares has now reached almost 10%.

Three of the world's largest dairy concerns — Nestlé, Danone and Lactalis — have recalled large batches of infant formula due to the risk of cereulide contamination. Cereulide is a heat-resistant toxin produced by bacteria of the genus Bacillus cereus, which can multiply in food.

The most common symptoms of possible cereulide exposure are vomiting and diarrhea shortly after consuming the formula, usually within 30 minutes to three hours. The symptoms are very similar to those of stomach flu.

The source of the contamination is linked to a single Chinese supplier of ARA (arachidonic acid) oil, a critical ingredient in premium infant formula.

Lactalis has become the latest company to announce a recall of six batches of its Picot infant formula brand, which was sold in 18 countries.

The contaminated batches have been on sale since January 2025 and have an expiration date of March 2027.

Nestlé was the first to withdraw its formula from the markets of more than 60 countries after the discovery of contamination at one of its facilities in the Netherlands. The company’s voluntary recall became one of the largest in its history and affected several brands, including SMA, Beba, Guigoz and Alfamino.

Barclays estimates that the possible financial consequences of the recall could be about ten times greater for Nestlé than for Danone.

According to the agency, in the worst-case scenario, Danone’s losses could amount to €100 million ($118.54 million), while Nestlé’s losses could reach about 1 billion Swiss francs ($1.29 billion).

According to Bernstein analysts, infant formula accounts for about 21% of Danone’s revenue. For Nestlé, this category likely accounts for around 5%.

Following the global recall of infant formula by the world’s largest companies, French authorities are investigating the deaths of two infants who reportedly consumed Nestlé infant formula recalled for cereulide contamination.

France’s Ministry of Health confirmed to the Euronews Health TV channel that a cause-and-effect relationship has not been scientifically established. Nestlé stated that it continues to monitor developments and is cooperating with authorities in full transparency, providing all necessary information.

The government of Flanders in Belgium confirmed that in January 2026 a child fell ill after consuming contaminated Nestlé infant formula.

"Tests have confirmed that she became ill due to cereulide contamination from a Nestlé dairy product," said Joris Munens, a spokesman for the Department of Health.

According to data from RTL Nieuws, at least four cases of health deterioration among infants in the Netherlands have been identified, which is likely linked to the use of Nestlé products.

• On January 6, 2026, Nestlé in Ukraine announced a voluntary recall of certain imported infant formula products of the NAN and Nestogen brands due to a potential risk associated with a quality defect in one of the ingredients.
• The company explained that in early December it had voluntarily recalled limited batches of infant formula sold in several European countries as a precautionary measure due to a potential issue on one of its production lines. These products were not imported into Ukraine.
• At the same time, Chairman of the Parliamentary Committee on Finance, Tax and Customs Policy Danylo Hetmantsev said that in several retail chains "such products are being sold without any problems". He suggested that the products may have been smuggled into the retail network.