25 May 2016
China Announces Key Points of 2016 Food Safety Work
The General Office of the State Council recently released the Circular on Issuing Key Work Arrangements on Food Safety in 2016 (for details in Chinese, please see: http://www.gov.cn/zhengce/content/2016-05/11/content_5072221.htm), which says that "steps will be taken to conduct a comprehensive inspection on the quality and safety of imported baby formulas and strengthen control over the quality of commodities".
The Circular calls for measures to "draw up a list of food safety risk hazards, outstanding problems and oversight measures, regulate the registration and management of baby formula milk products, continue to strengthen the oversight of infant supplement brands, milk products and other key products, and conduct a comprehensive inspection on the quality and safety of imported baby formula milk powder". In fact, after the tax reform on cross-border e-commerce, China has strengthened its oversight of cross-border imports, with milk powder for babies and mothers among the hardest hit. The industry thus sees the issue of this circular as a further blow to baby milk powder importers.
Numerous problems of substandard imported milk powder have been found in random checks in recent years. Seven batches of milk powder were found to be substandard on 12 May and all were imported products sold by their mainland agents. Among them, six products have nutrient content inconsistent with the information shown on the label and one has excessive bacteria.
In spite of this, many foreign brands remain undeterred by tightened oversight and are stepping up their mainland ventures with great confidence. Hosland launched its growing up milk, pregnancy milk and adult milk in addition to its original baby formula in the China market in early May. Mead Johnson also introduced its ultra-high-end products to improve its high-end product mix early this month. With this, the three leading brands of Wyeth, Abbott and Mead Johnson have all deployed their full range of low, medium and high end products in the China market.
Some milk industry experts see new policies such as the registration system as a blessing for leading brands as these may force some of the miscellaneous imported brands out of the market. With a high-end milk powder market estimated to be worth about Rmb20 billion, there is still considerable room for growth.