Ontario plant looking to sell baby formula in Canada. But will this help with the shortage? | Globalnews.ca

A large baby formula manufacturing plant in Ontario says it is looking to sell its products in Canada and China and has already made preliminary submissions to Health Canada as part of the regulatory approval process.

But even when it does get final certification to sell in Canada, Canada Royal Milk says the formula will not address current baby formula shortages, as its products will be for infants aged 12 months and older.

This won’t help parents of babies too young to ingest anything but breast milk or baby formula who have been left scrambling due to a U.S. shortage of infant formula — a phenomenon affecting the availability of some specialty formulas in Canada.

That’s why some experts say regulatory hurdles hampering Canada’s ability to produce its own baby formula, highlighted by the recent shortage, is part of a bigger political issue.

Canada Royal Milk, a Canadian subsidiary of the China-based company Feihe International Inc., built a $332-million plant in Kingston, Ont. that was completed in 2019. This investment from the Chinese company marked the first manufacturer of note for infant formula in Canada, according to the federal government.

The plant will use significant volumes of cow and goat milk to produce fortified cow milk powder, whole goat milk powder and skim goat milk powder for infants. But despite several reports to the contrary, Canada Royal Milk has not yet started manufacturing baby formula at the Kingston facility. The company is still in the process of preparing submissions for approval of infant formula for both the domestic and Chinese markets, said Carey Bidtnes, human resources manager for Canada Royal Milk.

“The plant was established to manufacture infant formulations primarily for export, and our website including the company description reflects this. However, the production of infant formula can only begin when the regulatory requirements are met.”

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The Canadian clinical trial for the company’s cow dairy infant formula is complete, and the company has submitted documents to Health Canada as part of the necessary pre-market notification process, Bidtnes said.

Health Canada confirmed it has met with Canada Royal Milk to discuss submission requirements, but has not yet received a complete submission for review. The company plans to complete a full submission to Health Canada by the end of the month, Bidtnes said.

“Upon receiving approval, (Canada Royal Milk) has the capacity to begin production of infant formula for the domestic market immediately.”

The nationwide shortage of baby formula in the United States has prompted concerns about supplies of formula in Canada. The shortage was triggered by the February shutdown of Abbott Nutrition, a key infant formula manufacturing plant in Michigan, which was closed due to a massive recall of some of its products.

Most of the baby formula available in Canada comes from the U.S. In 2021, infant formula was the top U.S. dairy product exported to Canada, representing 22 percent of total U.S. dairy products sold to Canada, according to U.S. agriculture department data.

On Tuesday, Prime Minister Justin Trudeau said Canada’s supplies remain “fine” for now, but Health Canada said last week certain provinces were running low on some specialized baby formulas for infants with food allergies and some medical conditions.

Health Canada “immediately recognized” the temporary closure of the U.S. manufacturing plant would result in shortages of infant formula, which is why it adopted an interim policy recommending the Canadian Food Inspection Agency (CFIA) to “temporarily exercise enforcement discretion with respect to certain labeling and composition requirements” for baby formula products imported from other countries, according to a statement the agency provided to Global News.

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The agency has also extended a temporary plan to import more baby formula from Europe to bolster domestic supplies.

“Health Canada wants to assure everyone that all products imported to mitigate the shortage and for which CFIA will apply discretionary enforcement are safe. These are from countries that have regulatory and manufacturing standards that are similar to those in Canada,” Health Canada said in its statement.

The U.S. shortage is raising questions about why the baby formula market is so concentrated and how the closure of one plant can wreak such havoc on supplies of an essential need for millions of families.

Sylvain Charlebois, a senior director of the Dalhousie University agri-food analytics lab and an expert in food distribution and policy, says Canada’s infant formula supply is far less stable than the prime minister’s comments suggest. He believes “dairy politics” are to blame.

Trade rules stipulate that Canadian companies are not allowed to ship baby formula to the U.S., while Canada’s supply-management dairy regulation system has highly restrictive tariffs on American imports of U.S. dairy products. This tension between American and Canadian dairy trade has left infant formula supplies “highly vulnerable,” Charlebois said.

“The baby formula market is not all that attractive, to be honest, because it’s a shrinking market. Birth rates in both Canada and the U.S. are shrinking, that’s why there has been a lot of (industry) consolidation and no one has thought very seriously about baby formula in Canada,” he said.

“Long-term, dairy politics have to be addressed on both sides of the border, and supply management is a big thorn. For the Americans it would mean (getting) more foreign dairy products into the Canadian market, and in return, we could actually have a plant in Canada…that could export to the U.S.”

In the meantime, Canada could become less reliant on American formula companies by working with Canada Royal Milk in Kingston and have them produce more baby formula for the domestic market, Charlebois suggests.

“China has invested in Canada, I think we should befriend the Chinese plant and actually work with them in order for that plant to serve the Canadian market as well as China.”

As of May 2020, Canada Royal Milk had plans to produce 30,000 metric tonnes of baby formula in Canada from cow’s milk and a separate operating line using goat milk, according to a briefing note prepared for Canada Agriculture Minister Marie-Claude Bibeau.

But the company says under Canada and FDA regulations it will only begin by manufacturing “stage three” and “stage four” formulations of baby formula, which can only be used for infants 12 months of age and older.

“This does not address the current shortages,” Bidtnes said.

However, the company is in the process of preparing a submission to Health Canada for a required pre-market review for formula for babies under 12 months.