Reckitt Faces Supply Chain Disruptions Following Tornado

Reckitt announced that short-term sales of its Mead Johnson baby formula are likely to be affected after a tornado damaged a third-party warehouse in Indiana. The company is working to minimize supply disruptions and has comprehensive property damage and business interruption insurance to offset the impact.

Reckitt announced on Wednesday that short-term sales of its Mead Johnson baby formula powder are expected to be impacted after a tornado significantly damaged a third-party warehouse in Indiana. The Mount Vernon warehouse, vital for both raw materials and finished products, has been out of operation since the tornado struck on July 9, according to the company.

All employees have been reported safe, and Reckitt has redirected inbound deliveries to other warehouses across the United States. A company spokesperson noted that some Nutrition SKUs would likely face short-term effects.

"We are collaborating with customers and suppliers on expedited recovery efforts to minimize disruptions by leveraging our global supply chain and managing inventory at alternative U.S. warehouses," the spokesperson added. Reckitt also indicated that comprehensive insurance coverage should largely mitigate the financial impact on earnings.

This incident represents a third setback for Reckitt this year. February saw an investigation reveal under-reported liabilities in the Middle East, causing share prices to plummet to their lowest since December 1999.

The following month, an Illinois jury ordered Reckitt's Mead Johnson unit to pay $60 million in a lawsuit involving the death of a premature baby allegedly fed with Enfamil baby formula.

(With inputs from agencies.)