Baby formula recall brings fresh trouble for billionaire family's dairy empire

For the secretive Besnier family, the controlling shareholders of Groupe Lactalis, the recall of potentially dangerous infant formula has revived uncomfortable memories of past crises. Just eight years after a salmonella scandal poisoned dozens of infants and led to criminal charges still winding through French courts, the world’s largest dairy company is again facing scrutiny over the safety of baby milk products — and over whether its family owners acted quickly enough.

The latest episode centers on fears that infant formula may have been contaminated with cereulide, a toxin that can cause vomiting, diarrhea and, in severe cases, death. Over recent weeks, Lactalis, Nestlé SA and Danone SA have pulled products from shelves worldwide. French authorities are investigating whether two infant deaths are linked to Nestlé’s Guigoz brand. While Nestlé and Danone absorbed immediate stock-market punishment, attention has turned to closely held Lactalis and the role of the Besnier family in managing the crisis, Bloomberg reveals.

“In the case of Lactalis, the family is ultimately accountable,” said Philippe Pele-Clamour, an adjunct professor at business school HEC Paris who specialises in family firms. “This can be a problem in crisis management.”

Lactalis announced its recall on January 21, roughly two weeks after Nestlé began withdrawing its own products. The company said it was alerted by a French trade body to potential contamination linked to arachidonic acid oil supplied by a Chinese producer.

Initial tests of both the ingredient and finished products were deemed “compliant,” but later analysis of prepared formula “revealed the presence of cereulide,” Lactalis said. The recall affected products sold in 18 of the 47 countries where they are distributed. Lactalis told Bloomberg News it has stopped using the supplier in question and is seeking guarantees from others.

The controversy has once again cast a spotlight on the Besniers — siblings Jean-Michel, Emmanuel and Marie — who control a dairy empire built through relentless acquisitions. Lactalis now sells products in roughly 150 countries under brands including President, Galbani, Parmalat, Yoplait and Kraft. Group sales have risen about six-fold over two decades to a record €30 billion in 2024, according to the latest available figures.

Despite repeated crises, Emmanuel Besnier, the third-generation chief executive, and his siblings have remained famously media-shy, rarely granting interviews or holding press conferences. Lactalis is a frequent target of French farmers over milk pricing and has clashed with tax authorities.

In 2024, the company agreed to pay €475 million to settle a dispute over international financing structures, according to a filing cited by Bloomberg, weighing on profits.

Yet the current scandal appears unlikely to derail Lactalis’ ambitions in infant nutrition, a market estimated at $51 billion globally. Shortly after the earlier salmonella outbreak, the group acquired Aspen Group’s infant formula business for €740 million, expanding its footprint across emerging markets.

“Lactalis is a long-term believer in the dairy space,” said Mary Ledman, a former strategist at Rabobank who’s now at industry publication The Daily Dairy Report. “They don’t have to worry about quarterly earnings and that has most certainly contributed to their success.”

That long-term approach, rooted far from Paris in northwestern France, has helped preserve the family’s privacy. It has also reinforced a culture that critics say resists transparency.

“The Besnier family has long clung to a culture of opacity,” Pele-Clamour said. “They are rooted in a place that’s far from Paris and other big capitals which helps them to remain discreet.”

By Sabina Mammadli