A2 Milk shares paused amid U.S. market hopes

A2 Milk told the ASX that the online article in the Financial analysis suggested today that the company is close to obtaining FDA approval, but “at this stage, there is no certainty as to the outcome of the application or the timing of any approval.”

Chief executive David Bortolussi hopes to follow in the footsteps of smaller rivals including Bellamy’s Organic and Bubs Australia, both of which have already gained access to the lucrative market dominated by a few local players.

“We have been informed that our candidacy is under active consideration and we hope that we can support American parents and caregivers during this difficult time,” Bortolussi told the Financial analysis before the commercial break.

A2 Milk does not sell any formula in the US market, but does sell its milk fresh.

Bubs initiated the application process and was one of the first infant formula manufacturers in the world to receive temporary approval from the US government to help address the nation’s infant formula shortage.

Bubs delivered more than 540,000 boxes between May and July, funded by the US government’s Operation Fly Formula. In late June, China-backed Bellamy’s Organic was cleared to sell products to ship at least 1.25 million boxes of its formula.

The last Australian infant formula maker to get the tick on July 8 was Care A2 Plus – a little-known infant formula player formerly named Acell Milk Australia.

Care A2 Plus makes Care A2+ formula for infants and toddlers using single-source milk from Australian grass-fed a2 cows.

The FDA has approved Care A2 Plus to deliver up to 4.8 million boxes of Care A2+ Premium Australian-made infant formula with iron and added lactoferrin to the US market. Its first orders of more than 250,000 boxes of infant formula are expected to ship from this week.

According to documents filed with the corporate regulator, the company was founded in 2019 with Dominic Galati, Kerry Hyland and Gary Lissa all appointed as directors.

In early 2021, it snatched $50 million in equity funding from alternative investment group LDA Capital. Other recent Australian companies in LDA’s portfolio include software group GetSwift, lithium player Altura Mining and technology group BrainChip Holdings.

Ms. Hyland who did not respond to requests for comment from the Financial analysis.

empty shelves

Around 160 companies have applied under the discretionary enforcement policy – ​​including New Zealand’s a2 Milk and Fonterra – all of which are seeking a foothold in the world’s second-largest infant formula market.

As Abbott Laboratories’ factory in Michigan reopened after being closed in February due to contamination concerns, and imports from global companies increased, US supermarket shelves in many places are still short of stock as the crisis enters its sixth month.

Despite the need, the US food safety watchdog has suspended emergency imports of infant formula from a UK-based company after accusing it of submitting altered documents to UK authorities, according to a Financial times article published on August 1.

The suspension of Global Kosher’s plans to export millions of boxes to the United States was a major setback for the country which traditionally relied on only three major players for domestic production, including Abbott, Reckitt Benckiser and Nestlé. However, this could provide more opportunities for local actors.