| 4.2°C Dublin

Danone quarter beats forecasts

DANONE reported first-quarter sales growth that beat estimates as renewed concern in China over the safety of baby-food products caused consumers to turn to established international brands such as Cow & Gate.

So-called like-for-like revenue rose 5.6pc, the company said, sending its shares to the highest in more than five years.

Baby-nutrition revenue jumped 17pc on a like-for-like basis, with "booming" Asia-Pacific sales being led by a need for "safety" in China, the company said.

Milk safety in the country became a major issue in 2008 when a melamine contamination killed at least six infants and concern was reignited in January when New Zealand's Fonterra Co-op found minimal levels of a fertilizer additive in some samples. Fonterra said there was no health risk.

Danone rose as much as 4.1pc in Paris trading.

Danone doesn't expect demand for baby-nutrition products to weaken in China, chief financial officer Pierre-Andre Terisse told analysts.

"The conditions for safety are not really standard in this country and therefore the need of the consumer for safety remains very strong," Terisse said. "It's difficult to see any sign for weakening of the demand at least in the short term."

Irish Independent