According
to Dairy
Products China News issued by CCM in
January 2014, on 25 December, the China Food and Drug Administration (CFDA)
held a press conference attended by a range of media and industry personnel
from processors such as Mengniu, Dumex and Nestlé. The event saw it announce
the release of the Detailed Rules for Infant Formula Processor Approval in 2013
(the Rules) and outline its review of processors’ production licenses.
The
Rules were finalised after soliciting opinions from the dairy industry and the
public in August last year. They set new requirements for infant formula
producers in nine aspects, including purchasing of raw materials, infant
formula inspection, manufacturing processes and product traceability.
Compared
with the initial draft, the final version saw some specific stipulations added.
For example, infant formula are divided into 3 stages to avoid confusion: 1st
stage for infants from 0-6 months; 2nd stage for 6 months to 1 year old; and
3rd stage for 1-3 years old. Moreover, it requires that production of infant
formula with dry and wet mixing processes should be completed at a single site.
Most of the main factories in China are wet-blending, however some processors
produce a base formula at a plant in the North by wet process, and then
transport the base product to another factory in the South where additional
nutrients are added by dry process – this practice will be forbidden.
Mr.
Ma Chunliang, an official at the CFDA, explained the stipulations with regard
to imported infant formula in the press conference, the area where the public
is most concerned. For example, he explained that production of infant formula
through dry process or wet process with imported base powder is allowed, but
that importing the base powder and then simply adding a few ingredients or sub-packaging
are not permitted.
In
order to urge all the processors to implement these Rules, the CFDA issued a
notice on 24 December indicating that it will review all infant formula
processors’ production licenses; the following aspects are notable:
The review must be completed by 31 May 2014, otherwise the processors will have
to halt production and will be offered a 2 years transition period to rectify
their production processes
Processors who pass the review should send the products’ formulations along
with samples of packaging and labels to the provincial CFDA offices to be kept
on file; those who want to change formulations, or product names, packaging,
labels etc should comply with the requirements for 1st/2nd/3rd stages (for 1st
stage formula, demineralised whey powder’s ash content must be ≤15% and WPC ash
content ≤5.5%), and will be offered a 1 year transition period to rectify
processes as required
Processors whose base powder and infant formula production are in different
factories will be offered a 3 years’ transition period for rectification
Mr.
Teng Jiacai, Deputy Director of the CFDA, said that the infant formula
processors who want to exit this sector can diversify into other products and
will get support from the government to do so. As a next step the Ministry of
Industry and Information Technology and other authorities will issue a policy
to support the development of infant formula industry and those companies
seeking to diversify in this way.
The
Rules involve stricter standards for domestic infant formula production, taking
production standards in the pharmaceutical sector as a reference point, in
order to guarantee better safety and quality. They also require processors to
take primary responsibility for quality problems, to strengthen inspection of
raw materials, to review their suppliers and to set up records systems to
monitor and control every step of the production process, as the potential
Fonterra food incident last year underlined the risks which could theoretically
be caused by upstream suppliers.
As
the standards for the industry are raised, processors will be under great
pressure and some small and mid-sized processors may be eliminated, but the
changes seem beneficial for the industry’s long term development and the Rules
are unlikely to disturb the supply and pricing of infant formula in China. They
constituted the 3rd announcement made by the CFDA about infant formula in
December, but many consumers will still doubt whether the quality of domestic
products is as good as imported products – this concept is so ingrained will
take a long time to change.
Guangzhou
Cancels School Milk Guide Price
Biostime
Acquisition Brings Local Production Capability
Government
Focuses on Infant Formula Safety
Import
Tariff Cut for Infant Formula
China
Tightens Supervision on Infant Formula Sales
Government
Concerns over Milk Safety and Quality
Detailed
Rules for Infant Formula Processor Approval in 2013 Released
Rebornne
Focuses on E-commerce
Fonterra’s
Challenge in China’s Dairy Market
Ausnutria’s
Profitability Challenged
Milk
Price Rises in Heilongjiang
Abbott’s
Similac Launched Online
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.
About CCM
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is dedicated to market research in China, Asia-Pacific Rim and global market.
With a staff of more than 150 dedicated highly-educated professionals, CCM
offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information,
Import/Export Analysis, and Consultancy Service.
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Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road,
Guangzhou 510070, China
Tel:
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