Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) today launched its Nutrilon infant formula in Israel today. A 400-gram can will cost NIS 46 and an 800-gram can will cost NIS 75, 5-10% less than the list price of Materna and Similac.
Teva said that the final price for consumers will be lower than the list price, because of discounts and sales campaign.
Teva reportedly invested tens of millions of shekels in the launch, which it says it will recoup within five years. Teva Pharmaceuticals Israel CEO Dan Danieli said that the company expects to win a 15% market share by 2015.
"Teva has not brought good news to consumers in terms of price. If someone wanted to deliver good news, he would have cut the product price by 30%," Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) CEO Rami Levi told "Globes".
Levi also doubts the Nutrilon's market potential, saying, "I don’t see any news here. Maybe in the long term, with patience, it may win market share. But in the short term, what mother will buy a product if it isn't 30% cheaper? There is Materna for NIS 40, and the new product for NIS 36. Would you buy it? If Materna costs NIS 40 and the new product costs NIS 25, you'll try it, provided that it's as good as Materna or Similac. Why should a mother replace them with a product to save NIS 3-4?"
Teva's list price is almost double the price that the consumer boycott leaders are demanding for infant formula: NIS 45 for a 700-gram can of Materna, made by Osem Investments Ltd. (TASE: OSEM).
Teva Israel OTC and consumer products director Hadar Merhav-Neeman told "Globes", "The main thing is the nutritional and basic values. We have a product with a unique and proven formula, which has reduced common children's diseases and digestive problems."
"Globes": Optimal invested tens of millions in its launch, and failed.
Danieli: "The entrance threshold in this area is parents' assurance in the infant formula's ingredients, as well as who manufactures and markets it. Did Optimal have that? No. Optimal was a private label. The public didn’t know who launched it, or who produced it. It didn’t meet the Israeli public's threshold."
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2011
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