Nestlé plans to close an infant formula factory due to China's plunging birth rate

• Nestlé is set to close an infant formula factory in Ireland due to falling Chinese demand.
• The food giant cited China's rapidly decreasing birth rate as a key part of the reason.

Nestlé is set to shut down an infant formula factory in Ireland in part because of the dramatic decline in China's birth rate, according to a statement from the company.

The world's largest food and beverage company said on Wednesday it was proposing to close its production facility in the Irish town of Askeaton by the first quarter of 2026 unless a buyer can be found.

The report cited dropping demand for infant formula in China, which it attributed to lower birth rates, as a factor in its decision.

"The number of new-born babies in China has declined sharply from some 18 million per year in 2016 to fewer than 9 million projected in 2023," the statement read.

"The market, which had previously been reliant on imported infant formula products, is also seeing rapid growth in locally-produced products," it added.

The Irish facility makes infant formula products exclusively for export to Asian markets.

The plant's research and development center would close in 2025, under the proposal, the statement said, with work transferred to two existing manufacturers in China and Switzerland.

China's fertility rate — the number of live births per woman — has declined over the last six decades, hitting a record low of 1.09 babies per woman in 2022, according to China's Population and Development Research Center.

Dropping fertility rates are partly the result of China's population policies, including its one-child policy.

Resulting labor shortages have triggered national policy changes like the end of the one-child limit and monthly or one-time payments for second or third children in many provincial cities, according to the China-Britain Business Council.

But China's limited ability to respond to this demographic shift will likely result in slower growth over the next twenty to thirty years, the US-based Center for Strategic and International Studies said in August, limiting its ability to compete on the global stage with the United States.

Nestlé's latest move means about 542 employees may lose their jobs, the company said, adding it will start a "consultation process" with the workers.

"In parallel, during this consultation, we remain open to approaches from a credible buyer," the company said.