Danone has announced it is going to sue Fonterra over baby formula recalls in 2013.
In August, Fonterra's products were infected by a botulism-causing bacteria and Danone uses these ingredients within its own range.
Fonterra said in a statement it "will vigorously defend any proceedings", although the product recalls turned out to be a false alarm.
"This affair illustrates serious failings on Fonterra's part in applying the quality standards required in the food industry," Danone said in a statement.
Danone lowered its full-year targets for 2013 as a result of the fallout from the botulism scare.
The share price of Danone has fallen today (January 9th) on the back of the announcement it is planning to sue New Zealand company Fonterra.
By 11:09 GMT, stocks were 0.66 per cent lower on the main Paris stock exchange when compared to the share price at the start of the day.
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