Apologies if duplicate The Australian Limits placed on baby...

Apologies if duplicate
The Australian

Limits placed on baby formula sales

BusinessSpectator
February 19, 2016 5:46PM


Major supermarkets working with Bellamy's to limit ammount of infant formula shoppers can buy.

The major supermarkets are working with baby food maker Bellamy's Australia to limit the amount of infant formula shoppers can buy.

An overwhelming demand for safe and clean infant formula in China has resulted in Australian supermarkets being stripped bare of formula, which has in turn been selling at exorbitant prices online.

Bellamy says getting stock on the shelves for Australian families proved a major challenge in the lead up to November's Singles Day in China, one of the world's largest online shopping days.

The company ended up directing Aussie parents to buy from its online shop, which led to a huge lift in its online sales.

Chief finance officer Shona Ollington says Bellamy's wants major retailers to introduce rationing.

"Naturally we can't police that but we did encourage it and some of those measures have been brought in which has been a great outcome," she said.

Some Woolworths and Coles supermarkets are limiting sales to four or even two tins per customer, displaying notices on shelves that cite "supply issues".

Ms Ollington said the company's online presence in China has ramped up since launching its flagship store only a few months before Singles Day 2015.

"The awareness of our online store has grown since then and we are confident we will have supply in place to manage consistency within Australia, and also manage those spikes in sales during those promotional periods in China," she said.

"The Hong Kong and Chinese consumer makes up about 15 per cent of our total revenue and that is continuing to grow."

Australia remains Bellamy's strongest market, contributing more than 80 per cent of group revenue, while it has grown its market share in Singapore..

The Tasmanian company, which also sells baby and toddler food, distributes to Malaysia and Vietnam and has plans to expand to other southeast Asian nations.

The priority is further expansion in Australia and China, however.

Bellamy's achieved a four-fold increase in profit in the half year to December due to strong demand from its two biggest markets.

To help keep up with the burgeoning demand for baby formula, the company has taken steps to increase its supply chain, including talking to Australian farmers about converting to organic farms.

The group also signed a five year contract with Fonterra in December to help ramp up its production of formula.

Bellamy's shares dropped $1.92, or 13.8 per cent, to $12.00, a fall analysts said may have been driven by profit taking after the stock's recent rally.

http://www.theaustralian.com.au/bus...s/news-story/3112c72a4f4ea21ca88307a184e5ac4e