These details had already surfaced four days ago, but renewed volatility in Danone’s shares was fueled by turbulence surrounding Nestlé after multiple recalls, compounded by today’s announcement from dairy giant Lactalis of a recall of its Picot infant formula brand due to the presence of cereulide in an ingredient sourced from a supplier.

About twenty minutes before the market opened, Danone shares were down nearly 8.5%, by far the steepest drop on the CAC index, with exceptionally high trading volumes. This marks the company’s sharpest decline since March 2020.

In a reaction note, analysts at Jefferies pointed out that Dumex sales—a product available only in Singapore, Malaysia, and Thailand—total around €120 million, according to data published by Euromonitor, representing barely 0.4% of the French food group’s revenue.

This assessment was echoed by Bernstein analysts: “If the issue is limited to Dumex, the impact should remain relatively negligible,” stated the research arm of Société Générale.

“However, if the contamination were to extend to the key Aptamil brand, that would be a problem of a completely different magnitude,” the research firm warned.

Bernstein noted that breast milk substitutes account for around 21% of Danone’s revenue—and an even greater share of its profitability—compared to just about 5% for Nestlé.

While industry watchers had expected Danone to benefit from the woes of its Swiss rival, these new difficulties could ultimately hinder its anticipated market share gains, which some experts had projected could reach €800 million.

The stock thus recorded a fourth consecutive session of declines, having already been hit earlier in the week by falling birth rates in China—a factor that could weigh on the group’s growth outlook in the long term.