Shares in Bellamy's have plunged more than seven per cent after the baby food and infant formula supplier said it faces delays in getting its infant formula registered for sale in China.
Under new rules that come into force on January 1, 2018, infant formula products for sale in China will have to be registered with the China Food and Drug Administration (CFDA).
Each manufacturing site will be limited to registering three brands with the CFDA, in order to increase the quality and safety of infant formula products sold in China and reduce the number of brands in the market.
Tasmania-based Bellamy's said on Thursday its China-bound products can no longer be registered at Bega's Derrimut canning line, following the sale of the plant to Mead Johnson Nutrition (Australia).
Bellamy's flagged in February that it may need to talk to other dairy processors about CFDA registration, and it is continuing to review several alternatives, including accessing registration of a different canning line that currently produces Bellamy's products.
The company said on Thursday it is confident it will obtain CFDA registration, but it will not have its products registered by January 1, 2018 due to the time required to complete registration and additional testing of the China-bound products at a different canning line, which could take up to six months.
In the first six months of the 2016/17 financial year, Bellamy's sales in China were worth $16 million, or 14 per cent of total sales.
The company said it is pursuing strategies to mitigate the extent of any interruptions to the supply of its China products.
Bellamy's shares were down 34 cents, or 7.6 per cent, at $4.13 at 1305 AEDT.
The shares were valued above $12.00 before a plunge in December, when Bellamy's flagged a significant drop in sales in China and twice downgraded its full-year earnings forecast.
Shareholders have since launched a class action alleging they were misled about the company's rapid growth in China.
Bellamy's shares staged a modest recovery last week, but Thursday's fall has them back near historic lows.
Share
