Government Strengthens Supervision of Imported Infant Formula

According to Dairy Products China News 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 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 dairy 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 1310:

Raw Milk Shortage Continues

Overview of Dairy Industry in January-August

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 15^th, 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

CCM 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. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
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Dairy Product Safety on the Agenda

Ensuring food safety and raising consumer confidence has been the central preoccupation of the whole dairy industry this year. In this context, the 19th annual meeting of the China Dairy Industry Association (CDIA) was held on 13-15 September in Fuzhou, Fujian province, with the theme of safety, responsibility, reputation, according to Dairy Products China News 1310 issued by CCM.

 

Due to the efforts made by the Chinese government and the dairy processors,the dairy industry has continued in its recovery with slight growth. According to the data from the National Bureau of Statistics, dairy output reached 13.1 million tonnes in H1 2013, with a YoY growth of 11.6%. From this figure, liquid milk/yoghurt and milk powder/formula reached 11.3 million tonnes and 0.8 million tonnes, up 12.4% and 5.9%respectively year on year. Meanwhile,the dairy industry recorded a net profit of USD1.4 billion (RMB8.7 billion) in H1 2013, up 23.6% YoY.

 

However, consumer confidence in domestic dairy products is far from restored, which can be reflected by a number of data. China imported 91,500 tonnes of infant formula (in retail packaging) in 2012, up 16.9% over 2011, while it imported 56,000 tonnes in H1 2013, an increase of 28.5%.Imports of liquid milk increased from 40,500 tonnes in 2011 to 93,800 tonnes in 2012 and then rose to 96,000 tonnes in H1 2013, up 152% over H1 2012. Moreover, all these figures exclude the volumes coming in directly as a result of consumers’ overseas purchases.

 

Additionally, the dairy industry continues to face insufficient milk supply. This has been underlined with the shortages in availability of domestic liquid milk in some cities since early September (this has been seen in diverse locations including Guangzhou, Shenzhen and Jinan). The shortage stems from falling cow numbers in key milk production areas as household producers have been exiting the market, leaving the large-scale dairy farms unable to keep pace with demand. The interrupted supply of milk powder from New Zealand has also played a part here of course. It appears likely that some companies will aim to safeguard their profitability by decreasing production of mid-market and low-end liquid milks in order to maintain output of premium products.

Promoting the safety and quality of dairy products is still the key task for the Chinese government. According to Mr. Ma Chunliang, Deputy Director of China Food and Drug Administration(CFDA), the Detailed Rules for Infant Formula Processor Approval will be released soon: this is in review phase,with 10,000+ opinions submitted from the public on its topics (please see Dairy Products China News Vol.6 September Issue, p8). The CFDA is now formulating other policies and measures, such as regulations controlling infant formula sales in pharmacies, labelling and packaging for infant formula, plus a system recording production information on the infant formula processors.

 

By the end of June, 917 dairy processors had received production licenses compared with 716 at the end of 2011. From the latest figure 128 are infant formula processors, compared with 119 at the end of 2011. Mr. Song Kungang, the CDIA’s Director, noted that China’s dairy industry has entered into an adjustment and refinement stage, and especially the infant formula industry will face consolidation as a number of dairy processors will be eliminated in the near future. (Note: some earlier figures put out on the total number of processors were lower due to the exclusion of small scale dairy companies). The changes on pharmacy sales are important when it is considered that dairy products sell at an estimated 2.1 million individual points of sale (that is retail stores of all types) around the country as against infant formula selling through just 500,000.

 

Mr. Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT), indicated that the acquisition and reorganization of the dairy industry will be promoted by both market mechanisms and government guidance. The key factors of production– inputs to the production process, including land, capital, information, etc – will be concentrated amongst the leading companies upon which the government will focus its support and also its pressure to upgrade. In addition, large-scale companies are encouraged to merge and reform small-scale companies; middle and small scale companies are encouraged to merge and set up industrial alliances; moreover MIIT is also encouraging competitive and listed companies to put in place international business strategies.

 

It’s worth noting that the China Chamber of Commerce of Foodstuffs and Native Produce (CCCFNP) established a dairy product imports working group on 11 September, part of the Chinese government’s move to ensure the safety of imported dairy products. This working group will specialise in solving the problems faced by the growing number of dairy product importers – currently, 1400+ import agents of dairy products have been recorded by the CCCFNP.

Table of Contents of Dairy Products China News 1310:

Key Processors’ Performance in H1

Dairy Product Safety on the Agenda

Dumex Caught in Bribery Scandal

Government Further Promotes Infant Formula Consolidation

Hebei Promotes Milk Powder/Formula Industry Development

Huishan Dairy IPO and Listing

Beijing Sanyuan to Expand Formula Business

Shengmu Farming Plans for Organic Growth

Tianyou Dairy Targets Infant Formula

Modern Dairy Performs Well in 2013

Yinqiao Biotech Launches New Fresh Milk

Treasure of Plateau Launches Yak Milk Infant Formula

Dairy Products China News, a monthly publication issued by CCM on 15^th, 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

CCM 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. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Stronger Focus on Food Safety

In mid-March the Chinese Ministry of Health (MOH) asked for advice from the public in response to the draft of the 2013 National Food Safety Standard, according to CCM’s monthly report, Dairy Products China News 1303.

The draft is mainly a revision of some food safety national standards, including food products, detection methods, food additives, nutriment supplements, nutrition & special diet foods and requirements for production and operation. It has also been suggested that a General Standard of Nutrition Supplement for Pregnant, Post-Natal and Breastfeeding Women should be set up.

In view of the significance of food safety, this is the 2nd time that the public’s views have been collected for the draft. By the end of January, the China National Centre for Food Safety Risk Assessment (responsible for the risk assessment, monitoring,early warning and communication of national food safety, and food safety standards) had received 1,288 suggestions on the topic, leading it to draw up a draft on this basis.

 

The draft is also a response to a succession of food safety incidents. Mainly because of the quality scandal which hit Mengniu, the draft has an added Aflatoxin detection method and a quality standard for raw milk. The arguably low standard of raw milk has been widely considered as key to most of the quality scandals hitting the dairy sector, with different parties quarrelling about what standard should be applied, pushing the government to address the issue.

Alongside the draft, a number of administrative measures have been taken to prevent food quality accidents:

• The MOH has strengthened the supervision of food products through national surveillance. In late January, it indicated that the focus of 2013’s work will be upon addressing issues in several key areas, notably grain, vegetables, meat, dairy products, infant foods and illegal additives. Infant foods, formula and accessories are of special concern. 50%+ of China’s county level administrative regions should monitor for food contaminants and other harmful factors, according to the MOH

• In early March, Gansu Province detailed its food safety work in 2013. Dairy products, edible oil, liquor, meat, food additive and etc. are listed to be important aspects and supervisors at all levels have to attend a total of over 40 hours’ training about food safety

 

• In mid February, the Department of Health of Guangdong Province solicited the views of consumers in respect of a range of regional food safety standard revisions, citing its goals as being to encourage progress in food safety technology, independent innovation and industry development

• Sichuan Province organised the “One Hundred Days Action”around the theme “2013 food safety”. The programme divides into 4 stages, from 20 February to 31 July, emphasising relevant departments’ responsibility in food safety

During the sessions of the NPC & CPPCC (the National People’s Congress and the Chinese Political Consultative Conference), food safety was a topic frequently discussed. Infant formula attracted the most attention, especially after the establishment of Hong Kong’s regulatory limits on purchases of infant formula products. Mr. Zhou, director of the State of Administration for Industry & Commerce of China, revealed that it will release specific rules to reinforce the management of infant formula products, which would cover the whole production chain, although no details about the specific rules have been forthcoming to date.

 

Although domestic dairy products have gradually regained some consumers’ confidence, the perceptions amongst the public remain a major obstacle. The General Administration of Quality Supervision, Inspection and Quarantine of China (AQSIQ) publishes data on qualification rates of domestic dairy products checked. It states that 99% of domestic dairy products are passing when checked nowadays, a rate higher than for imported dairy products. Mr. Yang, the deputy director of AQSIQ, announced that 0.26% of domestic dairy products failed when checked during 2011 and 2012, compared with a failure rate of 0.76% for imported dairy products in 2012; in the case of domestic infant formula the failure rate was 0.77% in 2012, 0.37% lower than for imported infant formula.

Clearly besides the various governmental actions, food companies are keen to play key roles in food safety, as demonstrating high levels of quality will be critical to their brand awareness an brand reputations. A good example of this was seen on World Consumer Rights Day (15 March), when Mengniu organised interactive activities nationwide to raise public awareness of consumer rights protection, in the process positioning its products as offering high quality and safety.

Table Contents of Dairy Products China News 1303:

Royal Dairy Growth Plan

Hong Kong Acts on Infant Formula Trade

The Price of Imported WMP Rises in March

Prospects for E-commerce

Stronger Focus on Food Safety

DMK Plans Expansion in China

Want Want China Prospers with Dairy

Strategy Adjustment at Black Cow

Modern Dairy Performs Well in H1 2013

Mengniu Launches New Ice Cream

By-health’s Strong Performance in 2012

MiMille Introduces Premium Infant Formula

Dairy Products China News, a monthly publication issued by CCM on 30^th or 31^st, 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

CCM 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. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Demand of China’s Taurine to Increase in the Future

CCM has launched the latest report on taurine, entitled Production and Market of Taurine in China, which reveals that China’s taurine market is promising in the future.

The report provides primary data and analysis of taurine industry in China in terms of production situation, price, consumption pattern and application field. Based on comprehensive investigation, CCM International forecasts the demand, output and technology development of the industry from 2011 to 2015.

As a nutrition enhancer accepted worldwide, taurine is applied extensively in foods, dairy products, beverages, forage, etc., especially in regions like the US, Europe and Japan. The application of taurine in China is still at an initial stage, mostly in pharmaceuticals, beverages and foods. Driven by the increasing demand, the taurine industry in China has kept developing fast in recent years.

The output of China’s taurine takes almost 90% of the global total. During 2008-2010, China's capacity of taurine increased from 45,500t/a to 86,000t/a with a CAGR of 38%, indicating a prosperous development of taurine industy.

In the future, with the improvement in people's health care consciousness, the demand for taurine will increase accordingly. China will become the most promising untapped market for taurine. During 2011-2015, the country's demand for taurine will increase with an expected annual growth rate of 15%-20%.

The following aspects are covered in this report:

- Production information (manufacturers, capacity, output, technology and price) about China's taurine industry;

- Current consumption and export situation of taurine in China;

- Main drivers and barriers for the development of China's taurine industry;

- Future development trend of China's taurine industry.

 (Guangzhou China, September 20, 2011)

About CCM

CCM 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 all through its new proprietary product ValoTracer.
For more information about Production and Market of Taurine in China, please feel free to contact us at econtact@cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China