Nutrition group Abbott is flying supplies of infant milk formula from Cootehill in Cavan to the United States daily to help mitigate a supply crunch that has seen stores rationing purchases for parents.
Supply chain glitches in the US market have been exacerbated by a recall of Abbott products triggered by an investigation by regulator, the Food and Drug Administration (FDA). Examining the hospitalisation of four babies, two of whom later died, it found all four had consumed milk powder made by Abbott at its plant in Michigan.
A subsequent examination of the Michigan site by the FDA found a range of quality control issues, including bacteria similar to the one affecting the hospitalised infants on the surface of some areas producing its powdered baby formula. Personnel working with infant formula also did not wear necessary protective apparel, the FDA said.
Abbott is the dominant player in the US infant formula market, with a 42 per cent market share, according to Euromonitor, and the shutdown of the Michigan plant has led to widespread shortages.
Rationing
These have grown worse in recent weeks, with more than half of all US states reporting at the end of April that half of milk formula products were out of stock at stores.
A number of major retailers have now imposed rationing, limiting the amount of formula parents can buy for their babies. The New York Times reported that listings on eBay were advertising some brands of formula at a price of up to $120 (€114) a tin.
The recall has disproportionately affected low-income families who rely on public benefits such as a programme called WIC because Abbott was the exclusive supplier for more than half of the agencies administering the programme.
Abbott has turned to its Cavan plant to try to reduce the pressure on supplies. In a statement on Tuesday, the company said it was “doing everything” it can to address the shortage, specifically mentioning daily flights of product from Cootehill.
It added that it was working closely with the FDA to restart operations at the Michigan facility.
Abbott would not answer questions on whether the diverting of supplies from the Irish plant to the US was at the expense of other markets.
Exports
It has been reported that Abbott will double infant formula exports from Ireland but the company would not confirm that, nor whether it had increased production at the Irish factory.
Abbott’s rivals in the US market have moved to 24/7 production in an effort to make up some of the shortfall and keep shop shelves stocked.
Established more than 46 years ago, the Cavan plant processes half a million litres of milk a day for infant formula from about 1,000 farms north and south of the Border.
It produces the company’s Similac infant formula and Gain follow-on brands and normally supplies southeast Asia, the Middle East, Latin America and Canada. However, the US generally uses domestic plants for its supplies. The company can use the Cavan factory as it scrambles for supplies because it is FDA-approved and registered.
Abbott has recently secured planing permission to expand capacity at Cootehill but this has since become the subject of judicial review and, in any case, will not come on stream in time to address the current crisis.
– Additional reporting: Bloomberg/Reuters
