(Reuters) – New Zealand’s a2 Milk Co Ltd has received U.S. approval to export its infant milk formula to the Unites States as the country faces a shortage of baby food.
Under the approval from the U.S. Food and Drug Administration (FDA), the dairy major will be able to sell and distribute its a2 Platinum infant milk formula product through to Jan. 6, 2023, the company said on Thursday.
The move will help plug a gap in baby food supply in the United States after Abbott Laboratories, the biggest U.S. supplier of powder infant formula, in February recalled dozens of products after reports of serious bacterial infections in four infants.
“If the U.S. requires further support over an extended period, we have the proven ability to scale up significantly,” said a2 Milk CEO David Bortolussi.
The company forecast sales during fiscal 2023 of up to 1 million cans all within the second half, assuming the FDA enforcement discretion remains in place throughout the period, it said.
It also flagged lower-than-average gross margins and higher distribution costs in fiscal 2023 due to potential air freight and rework costs in the near term, and marketing and trade investments to enter the U.S. market.
a2 had applied to sell its infant milk formula in the country earlier this year but the FDA had deferred its request in August.
(Reporting by Jaskiran Singh in Bengaluru; Editing by Shinjini Ganguli and Devika Syamnath)