Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Danone, Reckitt race to ramp up US baby formula supply amid shortage

Published 05/25/2022, 03:14 AM
Updated 05/25/2022, 05:25 AM
© Reuters. FILE PHOTO: French food group Danone logo is seen at the company headquarters in Rueil-Malmaison near Paris, France, February 18, 2021. REUTERS/Gonzalo Fuentes/File Photo
ABT
-

By Richa Naidu

LONDON (Reuters) -Danone SA has been doubling shipments to the United States of Neocate formula for infants allergic to cow's milk while Enfamil maker Reckitt is also working to boost supplies amid a nationwide shortage, company executives said on Wednesday.

Top manufacturer Abbott Laboratories (NYSE:ABT) in February recalled dozens of types of its Similac, Alimentum and EleCare formulas, creating one of the most urgent food shortages in recent history for U.S. families.

Reckitt said it is working "extremely closely" with the U.S. Food & Drug Administration (FDA) on ways to increase supply, including expediting the approval of some products made at a facility in Mexico.

"Accelerating this process, while still ensuring high safety and quality standards, would allow us to significantly increase supply to U.S. consumers," Robert Cleveland, Reckitt's Senior Vice President of North America and Europe Nutrition, said in prepared remarks that he may read later on Wednesday at a hearing with U.S. lawmakers on the shortages.

The British company, which supplies roughly half the U.S. baby formula market, said it is also working with the U.S. Department of Agriculture (USDA) to expand the availability of formula under a programme that helps low-income families.

Danone - the world's second-biggest baby formula maker after Nestle but a relatively small player in the United States with less than 5% of market share - is stepping up supply of Neocate more broadly.

“The Abbott recall affected 38 markets – it’s not only the U.S.," said Magdalena Broseta, Danone's Vice President General Counsel of Specialized Nutrition.

"Our factory in Europe is serving multiple markets...of course, the numbers and the volumes and the U.S. are bigger just because of the size of the market.”

The French company declined to say how many cans or tonnes of product it is exporting.

When asked if Danone would bring its flagship Aptamil formula into the United States, Broseta said the company had been discussing a number of options with authorities, adding that it was easier to increase imports of products that were already available in the country than introduce new ones.

"Their focus is to try to unblock any logistical situations that other players could be facing," she added. "It's a bit early to say what exactly would that entail."

Broseta said Danone is producing more formula at its plant in Liverpool, Britain and not rerouting product from elsewhere.

© Reuters. FILE PHOTO: French food group Danone logo is seen at the company headquarters in Rueil-Malmaison near Paris, France, February 18, 2021. REUTERS/Gonzalo Fuentes/File Photo

“We will keep on serving our existing geographies at the level of their respective demand," she said.

U.S. states, manufacturers to decide if gov't benefits apply to imported baby formula

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.