What’s new: U.S. health-care giant Abbott Laboratories will stop selling baby formula and children’s nutritional products in the Chinese mainland by next year amid stiff competition, the Chicago-based company’s Shanghai trading arm said Wednesday.
Consumer demand for babies’ and children’s nutritional products is changing, and there are already a number of other companies well positioned to provide such products and services in the Chinese mainland, Abbott said.
Abbott will gradually stop making and selling baby formula under the Eleva, PediaSure and Similac brands as well as the sub-brands of Total Comfort and NeoSure in China by 2023, the company said.
Instead, Abbott plans to focus more on expanding its medical nutrition and other businesses in China, including diagnostics, medical devices and pharmaceuticals, it said.
After the exit, Chinese consumers will still be able to purchase Abbott’s babies’ and children’s nutritional products from the company’s cross-border e-commerce platform, Abbott said.
The background: In February, Abbott recalled popular formula brands such as Similac after U.S. Food and Drug Administration inspectors found a deadly bacteria at a Michigan factory where the products were made. Four infants were infected with the bacteria, two of whom died.
Abbott said there is no definitive evidence linking its formula to the deaths and illnesses. But the investigation and interruption to production resulted in a 25% sales drop in the company’s U.S. nutrition business in the third quarter.
Abbott had a 4.9% share of China’s formula market in 2019, but that has since dropped to 3.6%, according to figures from market research firm Euromonitor International.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
Contact reporter Denise Jia ([email protected]) and editor Bob Simison ([email protected])
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