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usc75

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21/02/17

13:54

Post #: 22779926
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Originally posted by VivaLaVida ↑

Thanks for the correction about Fonterra product being processed by Blend and Pack... my mistake.

However, this doesn't change the overall issue of BAL re Chinese licensing. BAL don't require a licence themselves. The licensing sits with the canning and blending facility.

BAL have two long term contracts with TMI and Fonterra/Blend and Pack. Both TMI and Blend and Pack have Chinese certification (and have had these accreditations since at least 2014 according to this ABC article http://www.abc.net.au/news/2014-08-05/nrn-infant-formula-exports-to-resume-in-china/5649856).

Contracts are part of doing business and no business would operate without some sort of reliance on supplier and/or manufacturer contracts. Are there risks involved with contracts.... yes. But I wouldn't consider them as high.

Will China continue to tweak and adjust their certification parameters.... absolutely. Nothing remains constant. But at the end of the day, it is a symbiotic relationship... i.e. China needs the baby formula as much as the manufacturers need accreditation. So again, the risk exists, but it's not high.

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You're missing the point: do more research and read the new regulations (in Chinese) that come into affect Jan 1, 2018.

BAL Price at posting: $4.76 Sentiment: Sell Disclosure: Not Held
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