Chinese Buyers Fuel A Baby Formula Shortage

Bellamy's Baby Formula

In the weeks leading up to Singles’ Day [ China’s version of “Cyber Monday” on November 11 — cans of Bellamy’s Organic infant formula began flying off the shelves in Australia.

“We have encountered significant activity by some people who like to buy our product here from Australian retailers and on-sell it to consumers in China,” the company said in a statement.

“This has contributed to limited stocks of Bellamy’s products … It’s a fact that our brand is very popular in China, particularly leading up to ‘Singles’ Day,'” it added.

The country’s demand for foreign-made baby formula has been growing since 2008, when tainted baby formula led to a number of deaths and left thousands of babies ill.

Bellamy’s has been the first to experience massive shortages because it is a popular brand in China, accounting for about one-third of baby formula sales in the country.

Officials at Bellamy’s believe as much as 40% of its sales in Australia are servicing customer demands in China. In those cases customers are buying the formula in China and then exporting it to their own country.

One can of Bellamy’s Organic formula costs around $20 in Australia, but sellers on Alibaba’s can easily sell the same formula for $40.

The formula shortage problem has grown to the point where many stores in China are now limiting the number of units a single customers can purchase.

Bellamy’s rose around 3% in Sydney trading on Wednesday.

Written by Lane Hanson

Lane Hanson

Lane Hanson is BusinessPundit's Economy Editor. He reports on major changes in the US and Global Economies. He can be reached at College Reviews.