BUB chart, page-953

The chief executive of Bubs Australia is warning that up to 85% of the 2,500 baby formula brands being sold in China could disappear from the shelves as new Chinese regulations kicked in on January 1 this year, according to the Australian Financial Review.

We won’t see the impact of the shakeup right away as existing China-labelled products and those carried back by go-between agents called “daigou” can still be sold in that country.

The new rules mean that Chinese authorities have to approve offshore manufacturing facilities before any company can import and sell infant formula into the country and each approved facility is only allowed to manufacture for three brands.

It is believed that A2 Milk has been given approval late last year while Bellamy’s and Bubs Australia will secure approvals in the coming months.

But the ground is always shifting when it comes to government regulations. It’s bad enough in Australia, let alone in less transparent economies, so investors should be on their toes as 2018 could make or break many in the sector..