By Aimee Look

Shares in Danone fell as much as 12% after authorities in Singapore halted sales of a baby formula brand, citing potential contamination with the bacteria cereulide.

The stock later pared some losses to trade down 6.8% at 68.86 euros in European afternoon trading on Wednesday.

The French food company said in a statement that the Singapore Food Agency requested it block a batch of its Dumex Dulac, which it manufactures in the country, as a precaution. Danone said its controls have not identified any irregularities or issues regarding Bacillus cereus, which can produce cereulide.

"All our products are manufactured in line with strict food safety and quality standards and undergo rigorous testing before leaving our factories," it said. "All controls confirm that our products are safe and fully compliant with international and local regulations."

The concern over Danone baby formula follows a mass recall of baby formula by Nestle in various countries--for also potentially containing the same toxin--which can cause nausea and vomiting.

Danone's share price reaction, and the Nestle recall will shift investor focus onto what ingredients are used in the manufacturing process for the whole industry, analysts at J.P. Morgan wrote in a note to clients.

Though the sales exposure to Dumex Singapore is minimal for Danone, the market reaction reflects larger concern that nutrition products will be hit by similar recalls, the analysts said.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

January 21, 2026 09:11 ET (14:11 GMT)

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