Cabio Biotech(Wuhan)Co.,Ltd. ("Cabio Biotech," stock code: 688089.SH), a supplier of ARA, has become entangled in Nestle S.A.'s global precautionary recall of infant formula. Today, Cabio Biotech's stock price fell by over 13% following the market opening.
Nestle S.A. recently issued a global statement announcing a precautionary recall of specific batches of infant formula across 31 countries and regions, citing potential quality risks associated with ARA provided by a supplier. Subsequently, Nestle China also released a corresponding recall list.
An announcement on Nestle's global website indicated that the substance Cereulide was detected in the arachidonic acid (ARA) oil supplied by a vendor; this substance is typically produced by Bacillus cereus and may cause foodborne illnesses. Nestle stated it is conducting a comprehensive analysis of the cause with the supplier. However, Nestle also clarified that at the time of the announcement, it had not received any confirmed reports of illness linked to the problematic raw material.
According to the list published by Nestle China, the products affected in the Chinese market include four brands: Lactogen, NAN SUPREME, NAN Comfort, and Wyeth S-26 Progress GOLD, totaling 30 batches. Furthermore, all Nestle special medical purpose infant formula foods, NAN H.A., Illuma, and S26 PRIMA registered and sold in the mainland China market are not impacted by this recall.
Arachidonic Acid (ARA), also known as arachidonic acid, is an Omega-6 polyunsaturated fatty acid commonly used in infant formula foods and dietary supplements. Given its widespread application in infant formula, this incident has attracted significant attention from domestic consumers.
It is understood that the primary producers of ARA currently include DSM, Cabio Biotech, Runke Biology, among others. Nestle's announcement did not disclose the specific name of the supplier involved.
Following the incident, DSM released a statement on its official social media account, asserting that the ARA raw material in question was not supplied by them. When contacted today by a reporter posing as an investor, a staff member from Cabio Biotech's board secretary office responded via telephone that the company has already sent its products for testing and will issue an announcement once the results are available.
Financial reports show that in 2024, Cabio Biotech's ARA business revenue reached 390 million yuan, a year-on-year increase of 29.2%, making this product one of the company's core businesses. Cabio Biotech has previously stated in announcements that its ARA products have obtained certifications in Europe and America and have become suppliers to numerous dairy companies both domestically and internationally.
It is reported that some dairy companies have indicated that consumers have begun inquiring about the situation, and these firms are closely monitoring the final test results from Cabio Biotech. Other dairy companies have issued statements to distance themselves, claiming they do not use ARA raw materials from the supplier involved. According to an insider from a dairy company, ARA oil is generally used in dry-blending processes, whereas domestic enterprises primarily use wet-mixing or dry-wet composite processes, and they are also observing the development of the event.
Song Liang, an independent dairy industry analyst, commented that raw material suppliers for infant formula are generally quite concentrated, but the specific circumstances require further observation.
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