China approval boosts milk companies

Shares in infant formula supplier A2 Milk and Wattle Health Australia have climbed after both companies strengthened their regulatory position in the Chinese market.

A2 Milk announced yesterday its application to continue selling infant formula products in China has been approved by the China Food and Drug Administration.

Formula manufacturer Synlait Milk, which has been in partnership with A2 Milk since 2010, submitted the mandatory application in May.

A2 Milk’s registration process included tests on raw materials and finished products, certification of manufacturing standards, and packaging changes, chief executive Geoffrey Babidge said.

The company’s infant formula strategy in Chinese-labelled products had positioned A2 Milk well in the context of that nation’s regulatory requirements, Mr Babidge said.

“We look forward to the continued expansion of our business in China”, Mr Babidge said.

Under rules previously announced by Chinese regulators, all infant formula manufacturers must register brands and recipes with the authority for products to be imported into China from next January.

Also, foreign manufacturers of infant formula products in China must register that canning facility used to blend and pack the products with the Certification and Accreditation Administration of People’s Republic of China.

From January 1, all infant formula sold in China must be manufactured by a facility accredited by that agency, and each facility can only register up to three brands.

Wattle Health has completed its previously announced $5 million purchase of a 5 per cent stake in the Australian infant formula maker Blend & Pack, which has been licensed to produce infant formula for China.

Wattle Health said the deal ensured its infant formula range would be the first brand nominated by Blend & Pack for Chinese Food and Drug Administration approval.

The approval will allow Wattle Health to sell infant formula in Chinese stores and online from January 1.

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,” he said.

As seen in Hobart Mercury, September 29th 2017.