Australian infant milk maker and online retailer, Bellamay, suffered its second blow this last week after the recent acquisition of its Victorian canning facility had its Chinese licence suspended.
Only last month, ASX listed organic baby food retailer, Bellamy, completed a capital raise to pay $28.5 million for a controlling 90 percent stake in its new canning facility, Camperdown Powder, which it hoped would help it satisfy Chinese regulatory demands, which it requires to sell its products in China.
As a result, the company went into a trading halt on Friday, which is expected to remain until Tuesday this week, or until further notice from the company.
“We are working with Australian trade officials and channel partners to understand the reasons behind the suspension. Importantly, the suspension does not impact the sale of the company’s organic baby and toddler formula products, which are currently manufactured by Fonterra and Tatura Milk (Bega) under their respective CNCA licences,” Bellamy said in an ASX statement.
Chinese authorities had dispensed the licence suspension after regulators determined that pasteurisation procedures that Bellamy uses on its milk products exported to China were different to those for local consumption, according to a Bloomberg report,
Currently, Chinese sales represents 16 percent of Bellamy’s revenue. Once a success story, the company has seen its share price decline from a high of from a high of $14.68 to now $6.74, following plummeting sales and earnings as well as being deserted by its long-term CEO and a boardroom coup which saw the appointment of new directors.
** Image Source | Raising Faith