According to Dairy Products China News 1311 issued by CCM in November 2013, In order to support the work of central government in promoting the safety and quality of infant formula, on 27 September, China’s Administration for Quality Supervision and Inspection and Quarantine (AQSIQ) issued a notice—Strengthening Supervision of Imported Infant Formula. Requirements for imported infant formula are announced as follows:
• Foreign infant formula processors exporting to China are required to register locally in line with the Administrative Measures for Import and Export Dairy Products’ Inspection, Quarantine and Supervision (please see Dairy Products China News, Vol. 6 March issue, P7) and Administrative Regulation of Register for Foreign Food Producers Exporting to China. Unregistered foreign infant formula processors will be prohibited from exporting to China from 1 May, 2014.
• The imported infant formula’s shelf life must be more than 3 months from the date of inspection
• Imported infant formula must be pre-packaged for retail to avoid repacking and redistribution
• From 1 April 2014, imported infant formula packs must have pre-printed Chinese labels. Any such formula without Chinese labels or with labels that fail to meet Chinese laws will be returned or destroyed
These measures can be seen as part of the wider change of the governmental direction in several aspects:
• Increasing supervision by government and society, with emphasis on dairy enterprises showing self-discipline. The consistent theme of the governmental policies and regulations is to increase supervision and to encourage consumers to participate in this process. Alongside this, the government has also established an enterprise credit system, aiming to make food enterprises more transparent and hence more disciplined in their operations—especially the infant formula manufacturers
• Stricter and more detailed standards for infant formula products and manufacturers. Compared with the previous versions, the latest standards for infant formula products and their manufacturers are stricter and more specific, providing more details and practical measures for the government
• Promoting the restructuring of the industry. The government has taken many actions to promote this, the latest report about restructuring the country’s infant formula production being just one of these
• Supporting the domestic industry. The government has taken actions such as strengthening supervision of import/export trade in dairy products, online sales of dairy products, and the anti-monopoly investigation. It is clear that the main beneficiaries of such efforts will be the leading domestic dairy companies
A number of the impacts from the changed governmental direction may be summarized as follows:
• Improved consumer confidence and demand. Undoubtedly, the governmental moves have gone some way to rebuild consumer confidence, thus boosting demand.
• Increasing imports of dairy ingredients. Stronger demand and some of the changes in local milk supply have led to increasing demand for imported dairy ingredients and some finished products, a trend which will last for the foreseeable future.
• Fiercer competition. The increased focus on restructuring the industry—and especially the 128 local infant formula manufacturers—has combined with more and more domestic and multinational players entering the market to make competition still more intense, especially amongst domestic companies.
• More cooperation. The fiercer competition will also facilitate greater cooperation between domestic and multinational companies as they position themselves for a rationalized industry in the future.
• Price. Two main pricing trends are evident, as premium products are priced ever higher whilst mid-market and low-end products remain relatively stable. Overall, though, price levels will increase due to the increasing costs caused by the stricter standards and the impact this has on the raw materials used.
Table of contents of Dairy Products China News 1311:
Raw Milk Shortage Continues
Overview of Dairy Industry in January–August 2013
Heilongjiang Dairy Industry Development
Market Situation and Trend of Organic Milk
Government Strengthens Supervision of Imported Infant Formula
Government Focuses Further on Infant Formula Supervision
Want Want China Launches New Project in Hunan
Treasure of Plateau’s Infant Formula Development Plan
Meiji Dairies to Suspend China’s Infant Formula Business
Royal Dairy to End Distribution Network Expansion Project outside Guangxi
Yasheng to Target Dairy Farming
CALuckyCow Infant Formula Launches
Dairy Products China News, a monthly publication issued by CCM on 15th, offers you the latest information on new market dynamics, company development, new products, technology, packaging and raw material supply, etc. It also focuses on the government’s direction and polices, helping you get the whole picture of the industry.
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