One of the key suppliers of infant formula to Australian...

One of the key suppliers of infant formula to Australian supermarkets, The a2 Milk Company, has lifted its prices by 5 per cent but says the supply issues that dogged Australian parents late last year have now been addressed.

Peter Nathan, chief executive of a2, confirmed that the company had implemented a “modest” price rise for its flagship a2 Platinum product due to the outcome of a “cost review process”. Woolworths this week carried labels on the shelves apologising to customers for the price increase, which pushed the price of a 900g tin of a2 Platinum baby infant formula to $34.60.
It comes after the furore late last year when the listed Bellamy’s Australia lifted its recommended retail price for its Bellamy’s organic infant formula and its 900g Step 3 toddler milk drink by 33 per cent. At the time it said the price rise was due to global demand in organic milk supplies meaning the company could not maintain its pricing.
There were also major supply issues for local supermarkets as Chinese visitors stripped shelves of infant formula to sell over internet sites in China.
But Mr Nathan said he was pleased to report that supply to Australian retailers of a2 Platinum had almost tripled for the most recent six months compared with the previous six-month period.
“'This has led to improved stock availability for local consumers. We expect a continual improvement in supply,” he said yesterday.
Currently, all of a2’s Platinum infant formula is produced by Synlait in New Zealand.
A2 Milk said last month that it was expecting significant growth in direct sales of its Platinum infant formula to China after announcing its third profit upgrade in a year.
The group is now forecasting earnings before interest taxation, depreciation and amortisation to be in the range of $NZ45 million ($41.7m)-$NZ49m for the full year, underpinned by revenue in the range of $NZ335m-$NZ350m.
The previous EBITDA forecast was between $NZ33m and $NZ37m.
Infant formula now accounts for 53 per cent of a2’s overall revenue and Mr Nathan said it would go beyond 60 per cent during the second half.