Blackmores chief executive Christine Holgate.
BLACKMORES has launched its long-awaited baby formula range in pharmacies across the country today, with the company vowing to “prioritise Australian mums” battling shelf shortages caused by unprecedented demand from China.
The three formula products — Newborn, Follow-on and Toddler — have been developed in partnership with Bega subsidiary Tatura, which also manufactures rival brand Bellamy’s.
Blackmores chief executive Christine Holgate told news.com.au the company was directing more than 80 per cent of its initial supply to the Australian market, with the rest to be sold in China through Alibaba’s Tmall site.
By launching in a limited range of pharmacies only, Blackmores said each will be able to carry a greater depth of stock. Ms Holgate said a certain amount of stock will also be “reserved” for mothers to purchase directly from the Blackmores website, adding that the partnership with Bega also gave Blackmores greater control over production volumes.
“We’re very conscious of the shortages, and we’ve done a combination of different things [to address the issue],” she said. “Our product is priotised for pharmacies, partly because we don’t want to overflood distribution.
“It will be broadly available, but not so much that it’s so wide that no one can find it. Some pharmacies and retailers are just completely selling out of their product, and if a mum is feeding that product to their child and it’s not available, it can be a real challenge.”
The range will only be available in pharmacies to allow for greater depth of stock.Source:Supplied
Asked how much of the formula sold in Australia is expected to be resold to China, Ms Holgate said it was too early to say. “We are prioritising Australian mums. How much sells to Aussie mums and how much to Chinese tourists and others, I can’t honestly tell you because nobody really knows.”
Blackmores will eventually broaden supply to Coles and Woolworths once the business grows and mums become more familiar with the product. “When we’re launching something new for Australian mums, it was important to be able to back that mother up with medical advice,” she said.
“Generally as an organisation we support breastfeeding, but we recognise there are times mothers need a product they can trust.”
When Blackmores announced the joint venture with Bega in October, it sent the company’s share price soaring above $200 for the first time — a huge milestone which Ms Holgate describes as a “moment of great pride for the organisation”.
Investment bank JP Morgan has tipped Blackmores shares to hit $225 by the end of the year, but Ms Holgate is staying cautious. “On the share price, I can’t control what happens. I tell my team we have to focus on performance, and the performance will help contribute to the share price,” she said.
“But there are many other factors affecting share prices here. Do I believe the company has growth prospects even while Australian retail seems to have been a little subdued? Yes, I do. We believe we’ll provide growth for this year.”
Blackmores last year signed Li Na, the first Chinese tennis player to win an Australian Open, as a brand ambassador. She attended the launch event at the Blackmores campus in Sydney’s Warriewood along with Bega chairman Barry Irvine and federal Trade Minister Andrew Robb.
frank.chung@news.com.au
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