Blog: Hannah AbdullaDanone reveals baby formula supply issues in Australia and NZ

Hannah Abdulla | 24 April 2014

Danone

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.

Sectors: Baby food, Dairy

Companies: Coles, Danone, Fonterra

BLOG

Fyffes to face Ethical Trading Initiative disciplinary committee

A year after union officials alleged Fyffes abused workers on plantations in Central America - and called on the produce giant to be kicked out of the Ethical Trading Initiative forum - the company is...

BLOG

Could 3G Capital's next move be in foodservice?

Much of the chatter about where 3G Capital could look next has centred on packaged food - but might the private-equity fund be about to extend its foodservice empire?...

NEWS

Campbell sees further sales decline in H1

Campbell Soup Co. booked a drop in sales and earnings for the first half of its financial year today (17 February), with share losses in the US company's fresh division hurting the group results. ...

BLOG

Safety allegations could tarnish Mead Johnson's reputation

Headlines that Mead Johnson's board has backed Reckitt Benckiser's takeover bid will no doubt overshadow the other news on the group this week – that it is facing a US lawsuit from a “whistle blower” ...

BLOG

The list of UK's top five grocers has a new member

Kantar Worldpanel issued its monthly supermarket share data in the UK this morning - and the numbers showed a change in the identity of the country's top five food retailers....

just-food homepage



Forgot your password?