US – French multinational food group Danone has increased shipments of infant formula from Europe to the US in response to an acute shortage caused by the product recall by top infant foods manufacturer Abbott Laboratories.
Abbott laboratories 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, and voluntarily closed down its Michigan plant linked to the brands.
Ocean Audit CEO, Steve Ferreira has confirmed that Between January and May, Danone’s Nutricia division, has more than tripled its ocean imports to North America, and more than 90% have been delivered to the United States.
Danone said: “We understand how important it is for families to access these specialized formulas which is why our absolute priority has been to increase production and supply of these medical formulas to serve the most vulnerable babies since the shortages arose in February.”
The deliveries of new imports to the US markets recently show how the suspension of Abbott’s factory and shortages are shaking up the market, giving some players an opportunity to get a share of the lucrative US$4.8 billion in the US baby formula industry.
As of May 14, nationwide out-of-stock rates were reported to be 43%, up from 30% two weeks prior, according to Datasembly, with 90 percent of the formula in the US being just made by four companies, which includes Abbott Nutrition.
To address the shortage of the product in the US market and salvage the current situation, Food and Drug Administration (FDA), the US regulator, announced that it has increased flexibilities regarding the importation of certain infant-formula products.
The flexibilities include cutting red tape to make it easier for manufacturers to push through plans to maximize capacity and also offering a ‘streamlined import entry review process’ for products coming from foreign facilities with favorable inspection records.
In the last few days, Nestlé, the world’s largest food company, also started shipping infant formula products to the US from Europe to leverage the shortfall caused by the recall of infant formula.
Meanwhile, another infant-formula manufacturer, Reckitt Benckiser, has assured the US customers of the infant formula by saying it is increasing the production of US baby formula by about 30% to help to counter the shortage with immediate deliveries.
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