The containers are being destroyed after metal shards were found in the infant formula; Osem did not notify the public.
Osem Investments Ltd. (controlled by Nestle SA (SWX:NESN)) (TASE: OSEM) is destroying 10,000 containers of Materna, produced in April 2016, after the infant formula was found to contain shards of metal.
The company chose to destroy the containers without notifying the public, and claims that this is the "mechanical malfunction" reported in the past. However, at no stage did the company disclose that metal shards were found in the infant formula.
This report finds Osem-Nestle at a particularly sensitive period. Competition in the baby formula market is growing, as Shufersal Ltd. (TASE:SAE) launches its own-brand formula with Perrigo Company (NYSE:PRGO; TASE:PRGO. Furthermore, the discovery of salmonella in the hummus and tahini products of Tzabar Salads, owned by Osem-Nestle, also casts a shadow over the company. While salmonella contamination has been found in refrigerated salads produced by smaller companies before, its discovery in Tzabar Salads products, the leader in this category, was an unusual event which caused sales to plunge.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016
Materna infant formula, photo: PR