Amid Baby Formula Shortage, Major Production Facility in Canada Only Serves China

Baby formula is offered for sale at a grocery store in Chicago, Ill., on May 16, 2022. Cara Ding/The Epoch Times

With a baby formula shortage in the United States and Canada that has parents worried and scrambling, Canadians may be wondering what formula makers are doing to shore up supplies domestically.

Spotlight was put on Canada Royal Milk (CRM) in Kingston, Ont.—a major facility which describes itself as “the only producer of infant formula in Canada”—when it was brought to light that it only ships its product to China, and doesn’t currently serve the Canadian market.

The company is a subsidiary of Chinese dairy giant Feihe, which CRM describes as “Asia’s number one infant formula brand.”  Feihe was originally a sub-brand of Heilongjiang Farms & Land Reclamation Administration, which according to the state-owned China Daily, was “owner of a number of state-owned enterprises and farms across Heilongjiang province.”

The situation has raised questions by observers about Canadian policy that would allow CRM’s use of the nation’s supply management system—which tightly controls the market—and its use of taxpayer-subsidized milk, to serve another market.

Carey Bidtnes of CRM told The Epoch Times the company will be completing its full submission to Health Canada by the end of the month in order to obtain authorization to sell domestically.

“Production for the domestic market is part of the company’s business plan, but due to the Covid-19 pandemic, timelines for entry into the domestic and North American markets have been delayed," Bidtnes said in an email statement on May 19.

“Upon receiving approval, CRM has the capacity to begin production for the domestic market immediately.”

Bidtnes also said the Canadian facility currently sends “fortified cow milk powder, whole goat milk powder and skim goat milk powder” to China, and doesn’t yet manufacture baby formula in Canada.

When asked by The Epoch Times if the exported product is converted into baby formula in China, Bidtnes said in an email that these “powders may be used as an ingredient in other finished products.”

‘This Is Troubling’

The CRM plant, built in 2017, represents a $332 million investment, Bidtnes told The Epoch Times. The company received around $24 million in support from Ontario’s Jobs and Prosperity Fund.

Sylvain Charlebois, a professor in food distribution policy at Dalhousie University, has been vocal about the company’s production in Canada and its shipping of products abroad.

“The plant itself uses Canadian cow and goat milk. For any experts who understand how the Canadian dairy sector works, this is troubling,” he wrote in a blog post on May 18.

Charlebois points out that cow’s milk is partially subsidized by Canadians, while dairy farmers must meet quotas intended “to only serve Canadians” and that the supply management system is intended to feed “ourselves and nobody else.”

“To get Canadians to buy into our supply management regime, and to produce what we need in Canada, Canadian dairy farmers have long argued we can’t ship milk abroad and grow the Asian market,” he wrote.

“Since dairy farmers have no incentive to grow any markets at all, we have allowed a Chinese-owned company to invest in Canada, only to ship our own food back to China.”

He argues that the milk sold to the Chinese company should be off-quota and that the company should be Canadian-owned and operated to primarily serve the Canadian market.

China had a massive formula scandal in 2008 when the toxic industrial chemical melamine was found to have been used in some Chinese formula brands to artificially increase the tested protein content. Several hundred thousand children were affected by the melamine poisoning and at least six babies died.

Feihe was reportedly not implicated, and its brand was not impacted as much as other Chinese producers, which faced a backlash from parents who largely turned toward foreign brands.

US Shortage

The current U.S. shortage was exacerbated when baby formula produced by Abbott Nutrition at its Sturgis, Michigan, plant was recalled in February due to four children becoming ill and two dying from Cronobacter bacteria after consuming formula produced at that facility.

Abbott Nutrition and the U.S. Food and Drug Administration (FDA) entered into a consent decree subject to court approval on May 16 to restart production at the plant, with Abbott agreeing to take corrective measures required by the FDA.

After the facility is producing again, it will take six to eight weeks before products are available on the shelves, Abbot said in a May 16 statement.

The U.S. Centers for Disease Control and Prevention found multiple strains of Cronobacter at the Sturgis plant, but its analysis said they were not “closely genetically related” to samples taken from the two available patients.

The baby formula shortage in the United States prompted President Joe Biden to invoke the Defense Production Act on May 18 to help speed up the delivery of ingredients to manufacturers.

Canada has also taken steps to alleviate shortages that are reportedly already affecting some parents, by allowing the importation of formula that “may not fully meet Canadian regulatory requirements with respect to labelling and/or composition," a Health Canada interim policy says.

The policy notes that the products still adhere to “comparable standards” and provide instruction that “ensures the safe preparation and use of the foods.”

Editor’s note: This article was updated on May 25 to add statement by CRM that it currently only produces milk powder.