A2 Milk Sees Hopes To Sell Baby Food In US Curdled

By Dayeeta Das
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A2 Milk Sees Hopes To Sell Baby Food In US Curdled

A2 Milk Company Ltd said the US Food and Drug Administration (FDA) deferred its request to sell infant milk formula products in the United States, sending its shares down more than 12%.

The dairy producer and rival Fonterra FCG.NZ have been advised by U.S.-based trade group International Dairy Foods Association (IDFA) that the FDA has sent similar letters to all firms seeking approvals to sell infant milk formula in the United States.

FDA Notice

Fonterra, however, told Reuters that it had not yet received any such notice from the FDA itself.

An FDA spokesperson told Reuters in an email response that the FDA had sent letters to some firms, not all, deferring further reviews of applications due to a list of issues.

"For firms that received letters, they do not mean that the infant formulas are unsafe; rather, they indicate that we have found issues that would unlikely be resolved quickly," the spokesperson said.


The IDFA did not immediately respond to a Reuters' request for clarification.

"At this time, the FDA is deferring further consideration of the company's request for enforcement discretion to import infant milk formula products," a2 Milk said on Wednesday.

A2 Milk Shares Decline

Shares of a2 Milk tumbled as much as 12.3% to NZ$4.94 after the new came in and were headed for their biggest single-day drop since Aug. 26, 2021.

The FDA had previously said it would allow baby formula sold in other countries into the United States under a temporary programme with relaxed standards.


The U.S. government has also flown in formula from overseas plants.

The FDA has exercised its "enforcement discretion" provision to import certain infant formula products from Bubs Australia Ltd BUB.AX, UK-based Kendamil, Nestle SA NESN.S, and Danone SA DANO.PA.

However, companies like a2 Milk, Fonterra, Switzerland's Holle and U.S.-based Nature's One are yet to receive approvals.

News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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