WYETH-AYERST LEAVING U.S. FORMULA MARKET

AMITY K. MOORE

PHILADELPHIA -- Wyeth-Ayerst here is phasing out its U.S. infant formula operations, though international distribution will continue. Audrey Ashby, spokeswoman for Wyeth-Ayerst, said, the product "continues to be of the highest quality and will be available for several more months." She said the company, a division of American Home Products Corp., is looking to end production of SMA, Nursoy and Bonamil in mid-April.

Ashby said that upon review of its strategic strengths, the company decided to drop the domestic infant formula line for "business reasons." Increasing costs of competing in the market and the increasing growth of the Women, Infants and Children Supplemental Food Program contributed to the decision.

When Wyeth-Ayerst entered the market, WIC comprised only one-third of the market; now it holds 57%, Ashby explained. Though the third-leading manufacturer of baby formula in the United States, Wyeth-Ayerst accounted for only slightly more than 10% of the $2.03 billion category. For the 52 weeks ended Sept. 9, its SMA brand accounted for $152 million in sales, according to A.C. Nielsen, Schaumburg, Ill. Its Nursoy line brought it $74 million in sales, while its fledgling Bonamil brand accounted for just $4.1 million.

Since being introduced in the United States in October 1994 as a low-priced alternative to category leader Similac, Bonamil's packaging urged shoppers to compare its price to that of Similac.

When asked by SN whether Wyeth-Ayerst had tried to sell its three formula lines, Ashby would only say that the company "looked at a number of options before coming to this final decision."