Beijing moves to shift infant formula sales to pharmacies

Want China Times, Staff Reporter 2013-08-20

Infant formula at a supermarket in Beijing. (Photo/CNS)

Beijing plans to permit sales of infant formula in drugstores nationwide as a part of its efforts to ensure the quality of the products, reports Guangzhou's 21st Century Business Herald, citing a Chinese official at a seminar.

The measure is aimed at boosting public confidence in domestic and foreign formula producers and their products, said Xu Jing, a director at the Chinese Society of International Trade under the Ministry of Commerce.

Representatives from several milk powder suppliers, such as Nestle, Dumex, Mead Johnson, Wyeth, Abbott and Beingmate were invited to attend the seminar, along with individuals from noted pharmacy chains including China Resources, Jingxiang, Cachet and Sinopharm.

The ministry plans to implement the project in three phases from 2013 to 2015, and adopt a model of strategic procurement and unifying distribution and sales.

The first stage will be launched in Beijing and eastern China's Jiangsu province between October this year and the next Lunar New Year holiday at the beginning of next year, the paper said. Milk powder aisles will be set up at 20 pharmaceutical stores in Beijing and will be expanded to 10,000 stores in 100 cities after the Lunar New Year holiday. By 2015, another 10,000 stores will be added, and the total number of the cities covered will be 400.

"We hope to capture 20% of the market share in two and half years. In other words, we are targeting a share at least 15 billion yuan (US$2.5 billion) in a market estimated to be worth 70 billion yuan (US$11.4 billion)," Xu said.

Supermarkets, baby stores and online websites are currently the three main channels used to purchase infant formula in China. However, in European countries and the United States, the products are mainly sold at pharmacies to monitor the quality and safety of the products. Meanwhile, 60% of infant formula products in Hong Kong are also sold at drugstores.

Xu said that an international brand center will be in charge of the procurement and distribution, and this will help verify the origins of the products and ensure its safety.

Based on the ministry's data, there are around 420,000 pharmacies in China and 150,000 of them are drugstore chains. Considering their wide coverage across the country, they are ideal for milk powder sales. An insider working at Dumex said that customers buy infant formula at pharmacies in Europe because of the strict quality controls and convenience.