Infant formula suppliers The A2 Milk Company and Wattle Health Australia have strengthened their regulatory position in the lucrative Chinese market. A2 Milk’s application to continue selling its infant formula products in China has been approved by China’s health regulator, the China Food and Drug Administration (CFDA).
Formula manufacturer Synlait Milk (SM1), which has been in partnership with A2 Milk (A2M) since 2010, submitted the mandatory CFDA application in May. All infant formula manufacturers must register brands and recipes with the CFDA for products to be imported into China from January 1, 2018. Also, foreign manufacturers of infant formula products in China must register the canning facility used to blend and pack the products with the Certification and Accreditation Administration of People’s Republic of China (CNCA). From January 1, 2018, all infant formula to be sold in China must be manufactured by a facility accredited by the CNCA, and each facility can only register up to three brands.
A2 Milk’s CFDA registration included tests on raw materials and finished products, certification of manufacturing standards, formulation assessment, and packaging changes, Chief executive Geoffrey Babidge said the company’s multi-channel infant formula strategy in both Chinese-labelled products and English-labelled products had positioned A2 Milk well in the context of current regulatory requirements. “We look forward to the continued expansion of our business in China following this announcement,” Mr Babidge said in a statement.
Wattle Health has completed its previously announced $5 million acquisition of a five per cent interest in Australian infant formula maker Blend & Pack, which is licensed by the CNCA to produce infant formula for China’s market. Wattle Health said the acquisition ensures that its infant formula range will be the first brand nominated by Blend & Pack for CFDA approval. CFDA approval will allow Wattle Health to sell infant formula in China in bricks-and-mortar stores and online after January 1, 2018.
Executive chairman Lazarus Karasavvidis said completing the Blend & Pack deal was a significant milestone for Wattle Health.
“Not only will it help us execute and grow brand awareness across our Australian channels, but we’re also in a much stronger position to obtain the necessary approvals to be able to service the Chinese market,” Mr Karasavvidis said. A2 Milk shares were higher during Thursday’s sesssion but ended the day steady at $5.99, while Synlait Milk gained 49 cents, or 9.1 per cent, to $5.87 and Wattle Health added five cents, or 6.5 per cent, to 82.5 cents.
By TREVOR CHAPPELL and SIMONE ZIAZIARIS