Care A2 Plus working on ‘specific’ infant formula product for US market as shipments delayed

The ASX-hopeful has yet to send any of the five million cans of infant formula it has commitment to the US, saying it is working on something special for the Americans.

Care A2 Plus, one of a small number of Australian infant formula companies granted permission to import into the US, has yet to ship any product into the market three months after being approved.

But the company – which has flagged its intention to list on the ASX – says it is developing a “specific product” for the US, unlike other brands such as Bubs and Bellamy’s Organic, which are sending Australian stock.

The US regulator – the Food and Drug Administration – gave the company temporary approval in July to import 4.8 million tins of infant formula. The company had previously said it expected a first shipment to depart Australia in the first week of August.

Care A2 Plus was one of only nine infant formula companies globally to gain what is known as enforcement discretion from the FDA – leapfrogging much bigger rivals including A2 Milk, Fonterra and FrieslandCampina – which are all still awaiting approval.

But an FDA official told The Australian: “We are not aware of any shipments thus far from Care A2 Plus Australia”.

Care A2 Plus chief executive Steve Loader said the company planned to send its initial shipments to the US this month.

“Care A2 Plus has developed a specific product for the US market rather than sending existing Australian product,” he said.

Care A2 Plus is working on a ‘specific’ product for the US market, which has been plagued with shortages.

The FDA’s enforcement discretion was sent to expire next month, but this week the agency extended the approval it had granted the nine infant formula companies until October 2025.

“We are pleased that the FDA has extended the import discretion date for infant formula to the US,” Mr Loader said.

While Care A2 Plus is yet to send product to the US, ASX-listed Bubs – which received enforcement discretion in late May – has sent more than 800,000 tins of infant formula, while Bellamy’s Organic flew 166,000 cans to the US last month. The exports contributed 9 per cent to Bubs’s $104.2m in revenue last financial year.

Last month Care A2 Plus’ products were briefly removed from sale at Woolworths but reinstated less than 24 hours later. Its infant formula range was not subject to a compliance or safety recall and continued to be sold at Chemist Warehouse during Woolworths’ withdrawal.

It comes after the FDA suspended the temporary approval to UK infant formula manufacturer Global Kosher in June, which had committed to send 4.8 million cans of its Kendamil branded product to America. Combined with Care A2 Plus’ commitment, that accounted for 42.4 per cent of tins secured under ‘Operation Fly Formula’.

The FDA enforcement discretion process has attracted criticism from a group of Republican senators, who have accused the agency of “ignoring” applications when American parents are still struggling to find enough product on retail shelves.

The FDA has not granted temporary import approval to any new brands since August 10, and has written to A2 Milk and FrieslandCampina – the world’s biggest dairy co-operative, headquartered in the Netherlands – and has said it is deferring their applications.

Republican senators have raised concerns about the length of time it was taking to allow additional imports of formula into the country and asked the regulator’s commissioner, Robert Califf, why the FDA “has chosen to ignore so many applications”.

“What’s most concerning is FDA’s decision last month to defer further review of pending applications after taking over a month to respond,” the senators wrote. We understand from several manufacturers that FDA has still not indicated any attempt to review or prioritise increasing domestic production through competition,” the senators said.

Three manufacturers dominate the US market. Abbott Laboratories is the biggest player with 49.5 per cent share, followed by Mead Johnson with 20.6 per cent and Perrigo with 11.9 per cent.

The shortage of formula began when Abbott shut down its factory in Michigan earlier this year because of contamination, before closing its doors again in June after the site was flooded.