June 4, 2013
The National Development and Reform Commission is expected to allocate RMB1 billion (US$162 million) this year for the development of new milk sources, according to the Dairy Association of China.
A baby milk powder standard system according to international standards will be established to improve the quality monitoring of such products in the market in an open, transparent and standardised manner. The government will also firmly adopt the accountability system for baby milk powder manufacturers and intensify the crackdown on milk powder-related violations.
In addition, a campaign targeting baby milk powder safety will be launched to weed out unqualified baby milk powder source providers, baby milk powder companies, operators of milk collection stations and milk transport vehicles.
The cabinet's move follows plummeting consumer confidence after a series of domestic baby formula scandals. The industry lost consumers' trust after the Sanlu Group was found to have adulterated its infant formula with melamine, a chemical compound used to create plastic, in 2008. Six children died from drinking the milk, while 300,000 were sickened.
The Sanlu Group subsequently went bankrupt and profits of other Chinese dairy companies suffered greatly in 2008. Since then, Chinese consumers have been purchasing increasing amounts of milk powder from foreign countries or via online agents. The supervision system of online sales of baby milk powder and milk powder imports will be worked out to ensure safety, according to the statement.
Chinese consumers' craving for overseas milk powder has caused several countries including Australia, New Zealand and Germany to introduce quota measures to cope with China's growing demand for the products. A 2012 report by AC Nielsen said that four foreign brands, namely Mead Johnson, Dumex, Wyeth and Abbott, had taken over nearly half of the Chinese market, with sales totalling RMB38.52 billion (US$6.25 billion).
