A2 Milk share price on watch following China update

The A2 Milk Company Ltd (ASX: A2M) share price will be one to watch on Monday morning.

This follows the release of an announcement out of the infant formula company.

Why is the A2 Milk share price in focus?

All eyes will be on the A2 Milk share price at the open following the release of an update on the company’s Chinese label infant formula.

According to an announcement out of Synlait Milk Ltd (ASX: SM1), the dairy processor has received notification from China’s State Administration for Market Regulation (SAMR) that its current registration has been renewed.

This renewal allows Synlait to manufacture A2 Milk’s Chinese labelled infant formula until 21 February 2023 under the previous food safety standard. This is great news for A2 Milk as the current registration was due to expire later this month.

And while its registration has only been renewed for a further five and a half months, Synlait revealed that it is busy working towards achieving its re-registration under the new food safety legislation by February.

A2 Milk’s response

A2 Milk responded to the news, highlighting the above but also warning investors that while its re-registration activities are progressing, the timing of it is uncertain and remains subject to SAMR approval.

Positively, though, the company also highlights that the Ministry for Primary Industries has co-operation arrangements in place with SAMR. These position New Zealand well in relation to China registration processes.

A2 Milk’s CEO, David Bortolussi, commented:

We are pleased that our current product registration has been renewed, effectively to late February 2023, and we will continue to work collaboratively with Synlait and SAMR in relation to registration of our China label IMF product formulated in line with China’s new GB standards.

We remain focused on the China market and are looking forward to the opportunity to make our newly formulated infant milk product available to parents and infants in China. In all circumstances, The a2 Milk Company fully respects SAMR’s governance and timing of this important registration process.

The post A2 Milk share price on watch following China update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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