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Following the US Food & Drug Administration’s (FDA) approval of Bubs Australia (ASX: BUB) infant formula over the weekend, Australian Dairy Nutritionals (ASX: AHF) has advised it is also working closely with authorities to provide support in light of the USA's shortage situation.
The southwest Victoria-based business' share price has risen more than 30 per cent in the past week as the US FDA works around the clock to import more infant formula to ensure adequate availability throughout the country.
Previously known as Australian Dairy Farms Group, the vertically integrated dairy group only recently entered the infant formula market after developing two premium ranges.
“We have seen the problems experienced by those in the United States. As we watched the media coverage, we thought we could do something to help,” Australian Dairy Nutritionals CEO and director Peter Skene told Business News Australia.
“We're thinking about our shareholders, but we're also thinking about what it could mean to be short of infant formula and how important it is. Therefore, we started to reach out to the FDA, Global Victoria – the Victorian government's exporting agency – and Austrade.
“We quickly realised that we had product in stock; we refer to this as our future infant formula, that we believe will comply with all of the requirements in terms of the main requirements to get infant formula into the US.”
With the FDA being granted permission to use its discretion in providing some rapid import approvals, Australian Dairy Nutritionals registered its application on 21 May.
The business has been able to re-prioritise some of its stock that was due to be sent to Asia, which it can make available for export to the US almost immediately.
“We will be able to ramp up reasonably quickly, and we've been talking with ingredient suppliers and others to make sure that that's the same all around,” Skene said.
“This can have quite a positive material impact on our business, and we can have a good material impact on the availability of infant formula as well.”
The US Government are circumventing any potential shipping delays by scheduling chartered flights of infant formula directly to the US.
With the FDA moving quickly, Skene thinks the business will hear back on whether Australian Dairy Nutritionals’ application was successful within the next fortnight.
Skene was proud to see Bubs Australia get name-checked by the President of the US over the weekend.
“I just thought it was great for them and fantastic for Australia as well. Australia's infant formula and Australian dairy products are very well known around the world to be exceptionally high quality,” Skene said.
“I was very surprised when President Biden tweeted himself, but I know it's been very high profile, and then the President convened meetings about two weeks ago.”
Founded in 2010, all Australian Dairy Nutritionals’ formula range is made using farm-fresh Australian milk. Later this year, the business plans to produce Australia’s first Organic A2 infant formula made with Australian milk direct from a local farm.
Shares in Australian Dairy Nutritionals (ASX: AHF) finished down 9.2 per cent at $0.008 after peaking at $0.010 earlier during the day.
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