70 New Zealand formula brands may be forced out of China

Want China Times, Staff Reporter 2014-04-29

New Zealand milk powder brand Fonterra products at a supermarket in
Shanxi province. (File photo/CNS)

Around 70 New Zealand infant formula brands may be forced out of the Chinese market even though 13 major milk power exporters passed tests by the authorities which came after Beijing formulated a new law that will take effect next month, reports the Guangdong-based Yangcheng Evening News.

New Zealand food safety minister Nikki Kaye and primary industries minister Nathan Guy said last week that the Chinese government has confirmed that the 13 companies, which amount to 90% of exported milk powder in the country, have passed tests and are allowed to register in China.

Four Chinese officials were sent to New Zealand to examine dairy and infant formula factories last month after Beijing decided to ban imports of formula manufactured by overseas companies that do not register with the Chinese government.

Oceanian countries exported US$4.3 billion in dairy products to China last year, of which 4% was infant formula.

Even though the 13 companies got the green light, around 70 brands from New Zealand are likely to be banned under the new rules which require the brand to have direct contact with manufacturers. That suggests these brands have to have clear control and management over manufacturing processes and product formula.

An industrial insider said the figure could exceed 70 since manufacturers have also raised their standards. Now they are only willing to manufacture for brands that have certain amounts of sales, investments and brand influence. Many small brands are likely to be forced out of the market due to the new laws, said a Chinese milk powder trader.

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