A2 Milk recalls batches of US baby formula after toxin find

[WELLINGTON] New Zealand infant formula maker a2 Milk is recalling batches of product sold in the US after detecting a toxin linked to vomiting and nausea, marking its first brush with a contamination scare that has rattled the global industry.

Three batches of a2 Platinum USA-label formula have been recalled after manufacturer Synlait Milk identified cereulide, a2 said on Monday (May 4) in Wellington. The recall, which began on May 1, impacts just the US and not the company’s most lucrative market in China.

The global baby formula market has been buffeted by concerns over tainted products, which began in January when Nestle discovered bacteria that can cause cereulide, a toxin that can cause severe symptoms, at a factory. Rival producers Danone and closely-held Groupe Lactalis have also recalled hundreds of batches in dozens of countries.

While a2 had until now avoided the safety concerns, the recall lands at a fragile moment for the company. Its shares have already slid about a third over the past month after it cut revenue and earnings guidance, citing shipment delays to China partly linked to the Iran war.

“We see a risk that this recall could make its way on social media in China and cause damage to the brand,” said Sam Teeger, an analyst at Citi in Sydney. “We see risk that supply chain constraints may persist for longer than expected, and even when they are resolved, it may not be easy or cheap for a2 to win back consumers who have switched to competitor brands.”

The stock fell as much as 19 per cent in Wellington, heading for its biggest one-day decline since August 2024. It has fallen 33 per cent in the past four weeks.

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A2 said that its recall was initiated when cereulide was detected through additional testing by Synlait after New Zealand’s Ministry for Primary Industries released new guidelines in mid-April. The probable source of cereulide is an ingredient in the affected product, it said.

The recall is in relation to a relatively small quantity of three batches comprising 63,078 tins of which an estimated 16,428 tins were sold to consumers, the company said. Importation rights ended on Dec 31 last year and the product was discontinued and removed from sale prior to the recall.

No confirmed incidents of infant illness or harm have been reported, it said. BLOOMBERG