Few companies can make investment bankers wince purely at the mention of their name. Parmalat, the resurrected Italian food manufacturer, even prompts a desire to consult lawyers and compliance officers. Jury selection is underway in New Jersey for the company’s case against Citigroup, and multi-billion dollar claims against Bank of America and Grant Thornton may follow next year.

This week, however, the food manufacturer is also upsetting shareholders. Unexpectedly weak first-quarter numbers prompted the shares to plunge 11 per cent by Wednesday lunchtime. The bulk of Parmalat’s sales are of milk and it is suffering from the effect of rising dairy prices. The group pushed through price rises for its premium branded milk, but suffered sharp volume declines and had to increase marketing spend. Retailers, facing more cost-conscious consumers, have been aggressively promoting and pricing their own-label products.