Third Largest Player In Baby Formula Jumps In To Ease Shortage In US

  • Europe's Nestlé SA NSRGF is ramping up hypoallergenic (HA) baby formula production to alleviate the shortage in U.S. supermarkets.
  • In a statement sent to Fortune, Nestlé said it "significantly increased" Gerber Good Start Extensive HA production from the Netherlands and Alfamino from Switzerland, both used to treat babies that respond allergically to sugars like lactose.
  • Nestlé declined to be more specific on the size of increased shipments.
  • A recall by Abbott Laboratories ABT, persistent supply-chain issues, and a highly concentrated market combined to form what one consumer goods expert calls a "perfect storm."
  • Related: US Lawmakers Reveal FDA Emergency Funds Bill To Tackle Baby Formula Shortage: Reuters.
  • The most recent statistics suggest Abbott had a 43% market share, while Mead Johnson, maker of Enfamil, controlled another 40%. By comparison, Nestlé was a distant third with just 15%. 
  • The move comes after the FDA said it was encouraging overseas manufacturers to apply to ship their formula to the U.S., easing rules that had effectively prevented shipments from many such companies.
  • Abbott on Monday said it had reached an agreement with the FDA for the reopening of the Sturgis plant.
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