Blog: Danone reveals baby formula supply issues in Australia and NZ
Hannah Abdulla | 24 April 2014
Danone's Nutricia has revealed a supply strain in baby formula
The true impact of the Fonterra milk scare and the subsequent recall looks like it is surfacing, after Danone's subsidiary Nutricia announced a supply shortage in Australia and New Zealand.
Danone Nutricia's Karicare and Aptamil websites have announced that an "increase in demand" of products has resulted in "some short-term out-of-stocks on supermarket and pharmacy shelves".
Last August, Danone was forced to pull infant formula from shelves in a number of markets after fears some batches, supplied by New Zealand dairy giant Fonterra, had been contaminated with an ingredient potentially contaning a bacteria that can cause botulism.
The scare ended up being a false alarm but Danone has estimated the recall resulted in lost sales of EUR350m (US$476m) and has pressed forward with legal action against Fonterra.
The firm provided an update on ingredient sourcing as part of the supply shortage announcement.
"Danone Nutricia's product range has always been made from a blend of ingredients sourced from New Zealand, Australia and other overseas suppliers. A recent shift in Danone Nutricia's supplier network has led to a change in the origin of some of these ingredients.
"Our base powder will now be sourced from a number of other suppliers in Australia, New Zealand and Europe that have all met Danone Nutricia's rigorous quality and safety standards."
The news comes even though Australians are rationed on how much formula they can buy.
Last year, retailers Woolworths Ltd and Coles took steps to limit the sale of infant formula after it was found Chinese tourists were buying the products to bulk ship in to the country and sell at a premium due to high demand.
UK supermarkets also put a cap on per-person sales of baby formula amid products being shipped back to Chinese families wanting overseas-made lines - but facing high prices in their domestic market.
Months later, after a probe by Beijing into alleged price-fixing, companies including Danone were fined. After the investigation was launched, the likes of Danone and Mead Johnson moved to lower prices.
As the importance of health has grow in consumers' minds, frozen food has been left out in the cold. But two major manufacturers in the US are looking to heat up the sector by claiming frozen food mea...
Some analysts might be breathing a sigh of relief at news Danone is rejecting speculation it is about to swoop for infant-formula giant Mead Johnson. ...
Liz Truss, the UK's recently-appointed Secretary of State for Environment, Food and Rural Affairs, went on a whistlestop tour of the country's exhibitors at the SIAL trade show in Paris yesterday, bef...
It is an unseasonably mild and bright morning here in Paris as this year's SIAL expo gets under away. Will the mood of exhibitors match the sunnier weather?...
- Why Nestle is relaxed about the China "drag"
- Focus: Will Danone return to growth in dairy?
- SIAL 2014: Greek yoghurt firm Fage targets Europe
- Comment: Paying the price for eating healthily
- Focus: Why French retail deals could hit suppliers
- SIAL 2014: Premier in talks over US manufacturing
- Symington's acquires Tanfield Foods
- Danone "eyes acquisition of Mead Johnson"
- Heinz silent over Polish factory expansion talk
- Kellogg, Nestle slammed for "chaotic" salt policy