formula

Reckitt Benckiser ‘may shelve plan to sell infant-nutrition unit’

Reckitt Benckiser ‘may shelve plan to sell infant-nutrition unit’

UK consumer goods major Reckitt Benckiser is reportedly considering postponing plans to sell its infant-formula unit.

News agency Bloomberg, quoting unnamed sources familiar with the situation, said the sale, reputedly worth US$7bn, has fallen victim to “chaos in the industry and worsening financing markets”.

The company reportedly kicked off plans to sell its remaining businesses in infant formula in April and was said to be working with advisers on moves to sell the assets, which include the Enfamil brand. A number of private-equity firms, including Clayton Dubilier & Rice, were linked with a possible acquisition.

A sale would mark Reckitt’s exit from infant formula five years after buying US manufacturer Mead Johnson. Last year, the company sold its infant-formula operations in China to local investment firm Primavera Capital Group. Reckitt Benckiser kept an 8% stake in the business.

However, last month it was reported that potential buyers had been spooked by a US shortage of infant-nutrition products caused by the closure of an Abbott Laboratories plant following a salmonella scare.

Ironically, Reckitt Benckiser is one of the companies that has increased the production of its products to help keep supermarket shelves stocked.

But, according to Bloomberg’s report, talks between the London-listed company and potential acquirers have stalled in recent weeks.

Aside from the baby-formula crisis, the media outlet cited disagreement over valuation and a lack of available funding for reasons no deal has been sealed.

The structure of the sector is also coming under increased scrutiny by regulators, keen to ensure that shortages do not occur in the future.

The report said Reckitt Benckiser has not yet made a final decision on whether to formally pull the sale.

Just Food has asked Reckitt Benckiser to comment on the Bloomberg story.

Just Food analysis: Why there’s no single formula to fix US infant-milk market

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EXPLAINER: What we know about shuttered baby formula plant

WASHINGTON (AP) — At the center of the nationwide baby formula shortage is a single factory: Abbott Nutrition’s plant that has been closed for more than three months because of contamination problems.

On Monday, U.S. officials announced a deal with Abbott that paves the way to restart production at the Sturgis, Michigan, facility, the largest in the U.S. and source of leading brands like Similac.

But it’s not yet clear how soon the site will be up and running. And even bigger questions remain unanswered, including what caused the contamination and whether U.S. regulators could have alleviated the current formula shortage by stepping in sooner. The plant shutdown exacerbated ongoing supply chain problems among U.S. formula makers.

WHAT CAUSED THE SHUTDOWN?

In mid-February, Abbott announced it was recalling various lots of three powdered infant formulas from the plant, after federal officials began investigating rare bacterial infections in four babies who were fed formula. Two of the infants died. But it’s not certain the bacteria came from the plant; strains found at the plant didn’t match the two available samples from the babies.

The company halted production while Food and Drug Administration inspectors conducted a six-week investigation of the plant.

A preliminary report released in March found traces of a bacteria — cronobacter— on several surfaces throughout the plant, though not in areas used to make the powder. Plant records showed Abbott had detected the bacteria eight times in its products or facility since 2019.

Inspectors also flagged other problems, including standing water on the floor and employees who didn’t properly sanitize their hands.

WHAT IS CRONOBACTER?

The bacteria occurs naturally in soil, water and other parts of the environment. Infections with cronobacter are rare but can be fatal in babies. Almost all previous outbreaks in the U.S. have been linked to powdered baby formulas, which don’t undergo the same high temperatures used to kill germs in many other foods.

Sometimes the bacteria can get into powdered formula after its opened at home if a dirty scoop is used or it is mixed with water that’s contaminated with the germ, according to the Centers for Disease Control and Prevention.

Cronobacter typically causes fever in infants and can sometimes lead to dangerous blood infections or swelling of the brain.

The four reported illnesses were in Minnesota, Ohio and Texas between September and January.

WHAT ROLE DID ABBOTT’S FORMULA PLAY IN THE ILLNESSES?

It’s still not yet clear. The FDA hasn’t released a final ruling on the problems at the plant and whether they are linked to the infections.

“There are many factors involved in this ongoing investigation and we’re just not in a position to make any definitive statement,” FDA Commissioner Robert Califf said Monday..

Food safety experts say the case underscores the challenges of tracing foodborne illnesses.

Because there were only two samples collected from the four cases, “Right from the get-go we were limited in our ability,” to link the baby formula to the illnesses, said the FDA’s food director Susan Mayne. “We simply don’t have the evidence to demonstrate that causality.”

Abbot says the lack of a strain match indicates “there is no evidence to link our formulas to these infant illnesses.”

SHOULD THE FDA HAVE STEPPED IN SOONER?

The FDA is facing intense scrutiny about what steps it took — and didn’t — in the months before the recall.

FDA inspectors visited the factory in late September for a routine inspection, around the time that the first bacterial infection was reported in Minnesota. Although inspectors uncovered several violations— including standing water and unsanitary conditions — they didn’t find any bacteria and let the plant stay open. It’s unclear if inspectors were even aware of the first reported illness.

After three more cases were reported, the FDA returned to the plant in January and detected the bacteria.

The FDA mainly focuses on assuring the safety of the food supply, with extra regulations and standards on foods for babies and children. But former FDA officials say the agency is supposed to consider potential shortages that result from shutting down plants.

In previous cases, the FDA has worked with companies to shift production to other facilities or find alternative supplies.

The FDA is doing that now under a new policy that eases imports of baby formula from foreign manufacturers. But both the agency and the White House are facing questions on why that step wasn’t taken sooner.

“We always believe we can do better in terms of the time frame,” Califf said.

Rep. Rosa DeLauro, D-Conn., reported last month that a whistleblower had contacted the FDA in October with allegations about unsafe conditions and practices at the plant, including falsifying plant records and failing to properly test formula for contamination. She said the FDA did not interview the whistleblower until late December. Califf is scheduled to answer questions from DeLauro and other lawmakers on Thursday.

WHEN WILL THE PLANT RESTART PRODUCTION?

Both the FDA and Abbott say they are working as quickly as possible to restart manufacturing at the plant. But FDA officials say the onus is on Abbott to demonstrate its Michigan plant meets rigorous safety standards.

Former FDA officials say fixing the type of problems uncovered at Abbott’s plant takes time, and infant formula facilities receive more scrutiny than other food types. Companies need to exhaustively clean the facility and equipment, retrain staff, repeatedly test and document that there is no contamination.

Even after the facility opens, Abbott says it will take eight-to-ten weeks before new products start shipping to stores. The company continues to produce baby formula at its other plants in the U.S. and overseas.

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Follow Matthew Perrone on Twitter: @AP_FDAwriter

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

Abbott Nutrition restarts baby formula production in reopened Michigan plant

Shelves normally meant for baby formula sit nearly empty at a store in downtown Washington, DC, on May 22, 2022.

Samuel Corum | AFP | Getty Images

Abbott Nutrition on Saturday resumed baby formula production at its Sturgis, Michigan, plant, a move toward addressing a nationwide shortage.

The company has been given the green light from the U.S. Food and Drug Administration after meeting "initial requirements" as part of a May 16 consent decree.

The company said it will restart the production of EleCare, a formula for children who struggle to digest other products, along with other specialty and metabolic formulas.

Abbott aims for an initial EleCare product release around June 20 and is working to meet guidelines to resume production of Similac and other formulas.

"We understand the urgent need for formula and our top priority is getting high-quality, safe formula into the hands of families across America," a spokesperson for Abbott said in a statement. "We will ramp production as quickly as we can while meeting all requirements."

While supply problems started early in the Covid-19 pandemic, issues worsened in part due to the February closure of the Michigan plant amid scrutiny over contamination.

FDA investigations began after four infants were hospitalized with bacterial infections from drinking its powdered formula. Two of the babies died.

"The FDA is continuing to work diligently to ensure the safe resumption of production of infant formula at Abbott Nutrition's Sturgis, Michigan, facility," the FDA said in a statement.

"The agency expects that the measures and steps it is taking, and the potential for Abbott Nutrition's Sturgis, Michigan, facility, to safely resume production in the near-term, will mean more and more infant formula is either on the way to or already on store shelves moving forward," the FDA said.  

Abbott Nutrition is the largest baby formula manufacturer in the U.S.