BioGaia set to take bigger slice of probiotic profits

- Last updated on GMT

Related tags: Probiotic

Swedish probiotics firm BioGaia has taken over the marketing of its
Reuteri bacteria to the international dairy industry, formerly
managed by Denmark's Chr. Hansen, allowing it to boost revenue from
new dairy customers. It has also signed a new deal with a major
Asian food company.

Swedish probiotics firm BioGaia has taken over the marketing of its Reuteri bacteria to the international dairy industry, formerly managed by Denmark's Chr. Hansen.

An agreement in November 1999 giving Chr Hansen exclusive rights to market Reuteri to dairy customers worldwide has now been terminated. This will allow BioGaia to more rapidly increase revenue from new customers in the dairy segment, said the firm's managing director Peter Rothschild.

BioGaia​ also announced this week that it had signed a license agreement with a major food company in China and Taiwan for the right to use its patented probiotic bacteria in certain dairy products. The agreement is one of several new ventures set up by the small firm this year, including most recently a deal with Swedish food manufacturer Procordia Food.

The unnamed company will launch a yoghurt beverage on the Chinese market, where Reuteri has been approved for use as an ingredient in food products. The launch is scheduled for the second half of 2004 in China and during 2005 in Taiwan.

"For BioGaia this was a logical move which will further strengthen our position in the Asian market, where acceptance of probiotic products among consumers is greater than in other parts of the world. Not only is the deal expected to generate considerable revenue over the contract period but it has also accelerated the approval process for Reuteri in China,"​ said Rothschild.

He described the unnamed company as one of the leading food manufacturers in Taiwan, which has also established significant operations in China in recent years. It has an annual turnover of more than $1.5 billion and some 50 production plants in China, according to Rothschild.

The company also makes other types of beverages and foods which could be of interest in the future, given Reuteri's recent approval in China.

Earlier this year BioGaia signed an agreement for its LifeTop Straw to be distributed to a major Chinese dairy company. The product launch is expected to take place in April 2004.

The BioGaia news was slightly dampened by a further announcement that the firm is taking legal proceedings against its partner on the Swedish market Milko, which it claims has violated significant terms of their 2001 license agreement. Biogaia has ended the agreement and filed for damages. It will be looking for new licensees on the Swedish market.

The co-operation with Chr. Hansen on development and manufacture of cultures will continue.

Related topics: Probiotics & prebiotics

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