US defers a2’s bid to send infant formula
Danone only NZ firm approved to relieve shortage
The United States Food and Drug Administration has deferred a2 Milk’s application to export infant formula to the US because of “issues that would be unlikely to be resolved quickly”.
The FDA has been forced to allow some imports of infant formula into the US because of a supply shortage.
Some imports have already been approved, from Britain and Australia, but only Danone from New Zealand has successfully applied.
The FDA “is deferring consideration of these specific requests at this time and prioritising others for review”, a spokesperson told Businessdesk.
It did not mention a2 Milk by name but said it has “sent letters to some — not all — firms notifying them that the agency is deferring further review of their enforcement discretion request at this time”.
Earlier, a2 Milk said it had received notification from the American agency that it is deferring further consideration of a2 Milk’s request for enforcement discretion to export infant milk formula products into the US. “The company has also subsequently been advised by the International Dairy Foods Association that equivalent letters have been sent to all pending enforcement discretion applicants, indicating that the FDA is deferring any further review at this time of all pending applications,” a2 Milk said.
The New Zealand company’s shares sank more than 11 per cent on the news and were recently trading down 6.9 per cent at $5.24.
A2 Milk, like Fonterra, applied to import under “increased flexibilities” announced by the FDA in May as the US grappled with a nationwide shortage of infant formula.
List of issues
The letters sent by the FDA include a general list of issues the agency has identified with these requests that have led the FDA to defer further consideration of these specific requests, the spokesperson said.
According to the FDA, 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 be unlikely to be resolved quickly”.
The FDA is prioritising other applications, “given the nature of the infant formula supply challenges and the need to quickly address the shortages”.
According to the FDA, it “continues to work around the clock to address current supply challenges, including reviewing a number of requests from manufacturers for enforcement discretion, as quickly as possible”.
Fonterra still waiting
Fonterra, meanwhile, has not yet received notification from the FDA, but is not holding its breath.
“The International Dairy Foods Association has advised us that the FDA is deferring any further review at this time of all pending applications,” said Fonterra’s manager, trade strategy, sustainability and stakeholder affairs, James Mcvitty.
According to Mcvitty, Fonterra’s submission to the FDA was for a relatively small number of infant formula cans which had originally been manufactured for the NZ market.
He said Fonterra continues to support other infant formula manufacturers approved for sale in the US with base infant formula powder ingredients.
Fonterra produces paediatric base powders for select customers at its specialist plant in Darnum in Australia, and these are going to the US under the current emergency orders.
“We are now working through the process to ensure this is a long-term viable solution which includes meeting any additional US requirements for ongoing supply should permission be granted for our customers,” Mcvitty said.
Not material
A2 Milk, meanwhile, downplayed the importance of the issue, despite the market reaction.
It said the company is still standing by to support US parents and caregivers with about a million cans of premium A2 Platinum infant milk formula through to the end of the November discretionary period.
Earlier, the FDA said the “enforcement discretion” pathway would be open until November 14.
However, chief executive David Bortolussi said even if a2 were to obtain approval, he did not expect this opportunity over the current FDA enforcement discretion period would have “a material impact on the company’s financial results in FY23, due to the market dynamics and cost to serve of the US infant milk formula market”.