January 7, 2011

 

 

China's quality regulator will review all dairy producers in the country and issue new permits to qualified producers as part of efforts to improve quality after melamine scandals hit the industry from 2008.

 

The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) will require all dairy firms and baby formula makers to apply for new permits, sources said.

 

"The review aims to push forward large-scale production in the industry and improve quality and safety of dairy products," said Zhi Shuping, the administration chief.

 

Small plants with low quality standard and poor production facilities would be shut down, Zhi added.

 

China seized more than 100 tonnes of melamine-tainted milk powder last year, the latest case after the chemical contaminated milk powder was blamed for the death of at least six children and nearly 300,000 children were sickened in 2008.

 

The scandals have hurt the industry, dominated by Mengniu, Bright Dairy and Yili.

 

A survey last year showed that Chinese consumers were still not confident in the quality of domestic milk products. Rising concerns over product quality have driven up imports since early 2009.

 

China is now the world's largest market for whole milk powder. Imports of whole milk powder are estimated to have nearly doubled to 340,000 tonnes in 2010.

 

"The strength of Chinese import demand for milk powders reflects continuing consumer concerns about the safety of domestically produced products, following the detection of further products contaminated by melamine in 2010," the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report.

 

Around 90% of Chinese whole milk powder imports are supplied by New Zealand and Australia supplies about 5%.