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Drugmaker Teva Pharmaceuticals is considering entering the baby formula sector. Senior industry sources said yesterday that the company's OTC and consumer goods division has begun examining the market following the collapse of Remedia sales and its likely disappearance.

Teva stated in response, "Teva Israel is not examining entry into the baby formula market at this stage. However, the company constantly examines various opportunities to expand its healthcare operations in Israel."

The lack of competition in the formula market has reduced retail margins and gradually boosted prices. There are two players in the market today: Materna, sold by Maabarot products, and Similac, imported and sold by Promedico.

The market is estimated at an annual NIS 270 million but the threshold for entry is very high. The process of getting product approvals from the Health Ministry and kashrut officials is complex and long. Industry sources explain that the problem is exacerbated by overseas manufacture, as it is not always financially viable to maintain separate production lines for the Israeli market, a step Jewish dietary law inspectors demand.

Local cosmetics company Dr Fischer is also considering entering the baby formula market. The company is in talks with a number of international baby product manufacturers on importing their products to Israel. The company is also discussing whether to launch its new products under the Dr Fischer brandname, or another one.