A2 doubles production - demand still increasing

Milk formula shortage lingers

The rationing of infant milk formula on supermarket shelves reflects a higher demand for product rather than a shortage and Australian manufacturers have responded by ramping up production.

December 1, 2015 4:04am


-Tins of infant formula are for sale at a supermarket in Xuchang city, central Chinas Henan province, .


The rationing of infant milk formula on supermarket shelves reflects a higher demand for product rather than a shortage and Australian manufacturers have responded by ramping up production.
Milk Powder Australia owner Simon Hansford said Australian manufacturers were doing their best to keep up with the demand.
‘‘I know for a fact that they’re trying to get as much production as they can,’’ Mr Hansford said.
He said retailers should be working more closely with manufacturers and suggested all stakeholders including dairy farmers, manufacturers, marketers and retailers, have a forum and discuss this ‘‘opportunity’’.
‘‘Everyone should be happy about this demand and I don’t know why we’re not.’’
Two weeks ago, Country News contacted Bellamy’s and Danone Nutricia and both companies confirmed their production had significantly increased.
After an inspection last week, Country News can confirm that Coles and Woolworths supermarkets and Chemist Warehouses in Shepparton are rationing all brands of formula to two tins, four tins and three tins per transaction, respectively.
Rationing is in place nationwide.
Mr Hansford stressed that Australia’s dairy industry should capitalise on the increased demand and said a fair system could be developed to give priority to parents but also encourage indiscriminate buying.
‘‘Australian companies are doing very well in this market ... they don’t want to miss opportunities for sales,’’ Mr Hansford said.
He said Australian formula brands, particularly a2 and Bellamy’s, have gained more significance in past 12 months as Chinese consumers seek the safest and most organic formula.
The a2 Milk Company chief executive Peter Nathan agreed, saying a significant shift in brand preference indicated that consumers, including those from China, were increasingly seeking Australian-made products.
‘‘It’s not as though there’s no infant formula on the shelves it’s just that there are brands people want to buy more,’’ Mr Nathan said.
He said retailers had been asking the a2 Milk Company for higher volumes of formula.
Although it has virtually ‘‘doubled’’ production, Mr Nathan said the company was still unable to meet current demand from retail customers due to a ‘‘longer lead time’’ in manufacturing the a2 milk products.
The company only uses milk from cows that have a natural ability to produce a2 protein.
Mr Nathan said the company had been increasing production for 12 months now but the demand had exceeded forecasts.
‘‘We expect that demand for our brand will continue to grow,’’ he said.
The Australian Dairy Farmers said the industry believed this was a short-term supply issue, which would not impact farmers directly.
An ADF spokesperson said companies were working hard to maintain local supply and increase the availability for Australian parents and carers.
Sustaining supply to local families is the first priority.
The dairy industry believes the increased demand is a positive sign for dairy farmers and the industry more broadly.