Consumer Staples

JAT working with Austrade, FDA to supply infant formula to US

Fri 03 Jun 22, 11:19am (AEST)
Infant Formula Baby Formula A2M

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Key Points

  • JAT leveraging growing trade relationship between Australia and USA to supply infant formula to the market
  • Company already approved to distribute the products into Hawaii and West Coast US markets
  • Company notes the resumption of Abbott’s operations in the US may deflate somewhat the commercial prospects of the pivot

Chinese-Australian health and wellness consumer goods exporter JAT (ASX:JAT) is currently travelling through the approvals pipeline with the US FDA to export its infant formula products to the North American market. 

A baby formula shortage in the US has been a dominant force in recent weeks with a range of Australian companies seeking to enter the currently struggling market, including Australian Dairy Nutritionals (ASX:AHF), Bubs Australia (ASX:BUB) and A2 Milk (ASX:A2M)

One of the main drivers of the shortage is the shutdown of a key infant formula player in the US, Abbott. 

JAT is currently expanding its footprint in the US market as the company prepares to head into 2023 in a strong cash position with major debts paid off and a new range of snacks and drinks products currently greenlit for export into the US. 

(Source: JAT) A look at one of the company's existing milk powder products for children
(Source: JAT) A look at one of the company's existing milk powder products for children

JAT working with Austrade on application

JAT, via Austrade, is currently working with the FDA to pin down the satisfactory infant formula labelling requirements for the US market. 

JAT states its involvement in the Austrade-FDA dialogue is "part of the recently announced cooperation between the US and Australian governments." 

Matter of timing 

The company also notes that the apparent resumption of Abbott's operations is leaving the company moving ahead with cautious optimism. 

In between the lines, it is possible the regulatory permitting process may extend beyond the re-commencement of 'normal' supply chain operations for infant formula manufactured in America. 

The company's infant formula products are already approved for distribution into Hawaii and west coast states. 

The company's share price is up 6% today
The company's share price is up 6% today

 

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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