Baby formula shortage: Major retailers further restrict sales

Strong demand from China has led to a shortage in baby formula as manufacturers ramp up production. (AAP) Source: AAP

Coles and Woolworths have halved the amount of baby formula customers can buy, amid a stock shortage blamed on Chinese customers.

Coles and Woolworths have imposed tighter buying bans on baby formula amid a shortage blamed on Chinese consumers.

Fearful parents in China are turning to products sourced from Australia after a number of deadly formula scares.

Last week, Coles was limiting customers to four tins each, and Woolworths to eight.

But Coles is now allowing only two tins per customer, and Woolworths four, across all brands.

Both retailers say they're working to address the supply problems.

At least two popular Australian-made brands - a2 and the Bellamy's Organic range - are ramping up production but warn it will take time to catch up with demand.

The spike is being blamed on Chinese customers who don't trust the products they can buy at home, and are willing to pay vastly inflated prices for Australian-sourced products.

Earlier this month, reports surfaced of people stripping supermarket shelves of quality formulas, knowing they can be resold online and shipped to Chinese buyers for enormous profit.

Sites such as eBay have been carrying ads in both English and Mandarin, offering products that usually retail in Australia for $25 to $30 for between $150 and $190.

The shortage has been a PR problem for some brands, as mums complain loudly on social media about not being able to get their hands on the products they've always fed their babies.

But the spike in demand has been good for The a2 Milk Company.

On Tuesday, it revealed revenue from its a2 Platinum infant formula had quadrupled to $38 million in the four months to the end of October.

The strong growth in formula sales has prompted a2 to upgrade its full year revenue forecast to $285 million, up from previous guidance of $267 million.

The federal government has said it will only intervene in the shortage as a last resort.

Coles says it will give special consideration to families with a genuine need for more than two tins of formula, after a call from the Australian Multiple Birth Association.

"If someone has a genuine need, we'd take that into account and commonsense will be our guide," a spokesman told AAP.

The association has advised its members to take evidence of their family situations, such as birth certificates, when they head out to buy formula.

Source AAP

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