May 5, 2014
New Chinese milk regulations may hit New Zealand''s small exporters
The tough new Chinese industry''s new requirements which include demonstrating a close association between brand owner and manufacturer, and a new form of registration will spell the end for some of New Zealand''s smaller milk powder exporters.
Editor of the New Zealand Dairy Exporter magazine, Glenys Christian, says the new rules are part of "a wider move" by China to reassure their consumers about the safety of their products and to encourage local production over exports.
However, while there is little question of whether large exporters will pass the new criteria, for other smaller players it will be "decision time."
"Because the market has been so lucrative, of course small players have been attracted in and now China''s sort of in a situation of weeding out a few that it believes perhaps don''t exactly match up to what it would like to be portraying to its consumers," says Christian.
Fortunately, the high demand for milk products around the world means exports which don''t meet the new standards of the Chinese market won''t be left completely out in the cold, according to Christian.
China telegraphed its new requirements to the government last week by releasing an audit of a sample of New Zealand manufacturers conducted in March.
That left officials and companies scrambling to interpret the changes in time for the registration deadline. The government said earlier this week that manufacturers who control 90% of the nation''s infant formula exports were working through the registration process but the remaining 10% face a tougher job to comply.
Last year, infant formula made up about 4%, or US$200 million, to the nation''s US$5 billion dairy exports to China. China''s government is trying to bolster food safety and restore confidence in baby foods made of milk powder after melamine-tainted formula caused the deaths of six children and sickened 300,000 others in 2008.
The scandal sparked a surge in demand for imported product in the world''s most-populous country, where demand for dairy products is keeping pace with an emerging middle class. China already tightened rules for its own manufacturers last year.