Abbott Laboratories Chinese Infant Formula Violates China National Standards, According to Tests

HONG KONG, March 22, 2012 /PRNewswire-Asia/ -- An infant formula product produced by Abbott Laboratories (ABT.NYSE), failed to reach China national safety standards and tested worst among a selection of six infant formula powders sold on the Chinese market, according to a research report released by Hong Kong-based research house CER Research on Thursday.

The release of the research report on Abbott's Similac Stage 1 milk powder product coincided with Chinese media reports Wednesday of a father in the China city of Hangzhou who says he had found half of a condom inside an Abbott milk powder package which he had purchased for his daughter.

CER Research said it sent samples of six infant formula products bought in Shanghai and Hong Kong to a professional food testing laboratory, Muva Kempten in Allgau, Germany, for analysis, and had planned to use the Abbott product as a benchmark for quality, on the assumption that it would top the results.

"To our surprise, the Abbott product tested the worst of the six samples provided, and well below accepted international and even China standards," said CER Research CEO, Graham Earnshaw.

China requires infant formula to have a minimum whey to casein protein ratio of at least 60%. Abbott Similac Stage 1 product, bought in Hong Kong on December 16, 2011, failed to meet the standard by a wide margin. The tests also showed the Abbott product to have a very high heat treatment intensity. These are both significant negative factors with regard to infant formula.

High intake of casein protein has been shown to cause intestinal bleeding, malnutrition, diarrhea and kidney stress in infants.

The Research Director of INRA, the French National Institute for Agricultural Research, specializing in milk and egg research, Dr Didier Dupont, examined the Abbott sample test results and said that the whey/casein ratio was below accepted standards and the level of denaturation was "extremely high".

"Personally, I would not give this formula to my children," Dr Dupont said. 

Abbott's total mainland China revenues for 2011 are estimated to have been between US$0.95 billion - US$1.10 billion, based on CER Research's investigations. 

The full report, headlined "Abbott Laboratories Similac Stage 1; A First Step Towards Malnutrition", is available at www.cerresearch.com.

CER Research said it had submitted the test results and report findings to the relevant food quality assessment government organizations in Shanghai and Guangdong province – the Shanghai Municipal Bureau of Quality and Technical Supervision and the Administration of Quality and Technology Supervision of Guangdong Province. Both confirmed receipt and said they are looking into the case.

The poor performance of the Abbott infant formula product was confirmed in additional testing performed by DTS Food Laboratories in Kensington, Australia.

CER Research called Abbott Laboratories Hong Kong office and asked to speak to the quality control manager about a product quality issue and the receptionist declined to transfer the call without a specific name being offered.

"But to be clear, this is with regard to an important issue of product quality," the CER Research staff member said.

"I have to follow company policy," replied the Abbott receptionist.

The view of CER Research would be that a company selling milk powder and other similar consumer products should be willing to take calls with regard to product quality for consumers. The fact Abbott is not willing to do so is another indication that the company has a problem in terms of quality control in the China market.

CER Research provides due diligence and financial analysis services to companies looking to invest or do business in China.

Contact:
Graham Earnshaw
[email protected]
+852 3174 6136
+86 139 016 68748

or

Zac Aghion
[email protected]
+852 3174 6136

SOURCE CER Research