Supply stores

Down Under dairy companies consider US baby food sourcing after Bubs Australia approval

A2 milk is seen on a supermarket shelf in Singapore April 16, 2018. Picture taken April 16, 2018. REUTERS/Thomas White/File Photo

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May 30 (Reuters) – Dairy companies in Australia and New Zealand are lining up to restock empty shelves in the United States with baby food, after the country recently eased its import policy to ease the one of the biggest infant formula shortages in recent history.

New Zealand dairy giants Fonterra (FCG.NZ) and a2 Milk (ATM.NZ), and Australian private company Bellamy’s Organic confirmed on Monday that they had submitted requests to the US Food and Drug Administration (FDA) to supply baby food in the country.

This followed another Antipodean company, Bubs Australia (BUB.AX), signing an agreement with the FDA to ship at least 1.25 million cans of its formula. Shares of a2 Milk (ATM.NZ) closed more than 10% higher, while Bubs Australia jumped 40%. Read more

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“I have more good news: 27.5 million bottles of safe infant formula made by Bubs Australia are coming to the United States,” President Joe Biden said in a Tweet on Friday.

“We are doing everything in our power to put more formulas on the shelves as soon as possible.”

The U.S. baby food shortage was sparked when Abbott Laboratories (ABT.N), the largest U.S. supplier of powdered infant formula, including Similac, recalled dozens of products in February after reports serious bacterial infections in four infants.

Abbott was on track to reopen its main infant formula plant in Michigan within a week or two, although FDA Commissioner Robert Califf told lawmakers a week later that it would take until July to fill store shelves across the country. Read more

“In light of the current situation and revised FDA guidelines, we have submitted an application to the FDA for approval to supply finished infant formula to parents in the United States,” said Fonterra, the most largest dairy producer in the world, in an e-mailed statement.

Emergency supplies from Europe arrived earlier last week after the Biden administration moved to urgently respond to domestic shortages by easing import rules.

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Reporting by Harish Sridharan and Rushil Dutta in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich

Our standards: The Thomson Reuters Trust Principles.