French dairy company Lactalis to compensate users for salmonella contamination of baby milk powder

French dairy company Lactalis will compensate "every family" caught up in a salmonella contamination of its powdered baby milk. The company has recalled 12 million tins of formula amid several lawsuits over the health scare.

Even as the French government welcomed the compensation pledge, a spokesman said a judicial investigation to determine who was responsible would continue.

According to Lactalis chief executive Emmanuel Besnier who spoke to the weekly Journal du Dimanche, his family company, one of the world's biggest dairies, would "pay damages to every family which has suffered a prejudice". He however, did not say how much the damages might amount to.

Salmonella infections can be life-threatening and the families of 36 children who have taken ill in France due to the contaminated baby milk have announced several lawsuits.

Besnier's promise comes two days after Lactalis widened a product recall covering all infant formula made at its Craon factory, regardless of the manufacture date, in a bid to contain the fallout from a health scare that risked damaging France's strategic agribusiness in overseas markets.

"Paying compensation is good, but money cannot buy everything," government spokesman Benjamin Griveaux said in an interview on BFM TV.

The health scare grew worse last week, after France's biggest retailers admitted products recalled in December had still found their way onto shelves.

''We must take account the scale of this operation: more than 12 million boxes are affected,'' Griveaux said yesterday.

''They know that everything has to be removed from the shelves.''

Earlier there had been accusations that the company had sought to hide the discovery of salmonella at the factory and bungled handling of the subsequent crisis, which has been denied by Besnier. The French authorities' handling of the health scare has also been slammed.

A total of 37 cases of infants suffering salmonella after consuming the powder have been reported so far, 35 in France, one in Spain and another suspected case in Greece. According to a victims' association, this was the tip of the iceberg and the authorities were underestimating the number of cases.