Reckitt warns over hit to baby formula sales after tornado damages US warehouse
The Nurofen-to-Dettol maker said its third party warehouse in Mount Vernon, Indiana, suffered ‘significant damage’ from the tornado.
![A new probe into the supply of baby formula milk has been launched by Britain’s competition watchdog after it found that prices had soared by 25% in the past two years (PA)](https://static.independent.co.uk/2024/02/20/08/20082130-c2e3a15a-b0b8-417c-9bb1-1a2cb2cad243.jpg)
Support truly
independent journalism
Our mission is to deliver unbiased, fact-based reporting that holds power to account and exposes the truth.
Whether $5 or $50, every contribution counts.
Support us to deliver journalism without an agenda.
![Louise Thomas](https://static.independent.co.uk/static-assets/support-us/louise-thomas.png)
Louise Thomas
Editor
Household goods giant Reckitt Benckiser has cautioned over a hit to sales of Mead Johnson baby formula powder after a warehouse in America was struck by a devastating tornado.
The Nurofen-to-Dettol maker said its third party warehouse in Mount Vernon, Indiana, suffered “significant damage” from the tornado last week.
It confirmed that all employees are safe, but said there would be a short-term hit to sales, given the importance of the warehouse for the Mead Johnson Nutrition business, which makes baby formula.
The group confirmed that the site is covered by property damage and business interruption insurance, which it hopes will “largely offset” the knock on effect on earnings.
Reckitt said: “The Mount Vernon warehouse is an important site for the Mead Johnson Nutrition business, containing a mix of raw materials and finished products.
“Whilst Nutrition sales will likely be affected in the short term, we are working closely with all our stakeholders including customers and suppliers, to minimise disruption, by leveraging our global supply chain and managing inventory at our other North American Nutrition warehouses and held by our retail partners.”
Reckitt said it is diverting all inbound deliveries to its other warehousing facilities across the US.
It will update further on the situation at its half year results on July 24.
Analysts at Jefferies said they estimate the issue could lead to a quarterly loss of sales of around £60 million, with a profit contribution loss of up to £40 million, but added this was likely to be largely insurance covered.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.