French food group Danone has reported a slowdown in first-quarter sales growth as sales volumes at its core dairy division were hit by the company passing on higher milk prices and sales in the baby food business also fell, though less sharply than feared.

French food group Danone said group sales growth would accelerate in 2014 as a recovery in European dairy gathers momentum and that it aimed to return to strong profitable growth from the second half of the year.

Danone said yesterday an Asian recall of infant formula had a worse-than-expected impact on its high-margin baby sales division in the third quarter and that sales in affected markets would not recover before next year.