Nestlé shuts down baby formula factory over falling Chinese birth rate

The 542 workers of Nestlé’s Askeaton factory and Research and Development (R&D) facility will face redundancy as early as the beginning of 2025.

Operating as Wyeth Nutritionals Ireland Ltd, the factory was acquired by Nestlé in 2012.

In a statement released on Wednesday, the Swiss multinational corporation said the Irish R&D operations would be absorbed by one of their other R&D centres based in Konolfingen, Switzerland.

The Askeaton factory production will be split between the same Swiss location and Nestlé’s factory in Suzhou, Mainland China.

In its statement announcing hundreds of job cuts, the multinational insisted the move was “no reflection on the excellent contribution made by our employees in Askeaton over many years”.

Plummeting Chinese birth rate

Nestlé says instant formula needs in Greater China and Asia, where all the Askeaton factory production is exported, are in free fall.

China’s birth rate for 2022 reportedly dropped to its lowest level since 1949, with 9.56 million babies born. Last year, China’s population also began to decline for the first time in decades.

With 1.09 births per woman, China’s birth rate keeps on declining, and has been lower than EU countries’ birth rate since 2019.

Such a sharp decline naturally leads to less demand for infant formula. But Nestlé also says demand for locally-produced powdered milk is growing: “In 2008, a melamine crisis impacting local infant formula manufacturers in Mainland China resulted in eroded consumer confidence in locally produced products.”

Since then, Chinese authorities’ efforts to restore confidence have boosted locally-produced formula sales.