China further tightens quality controls on milk imports

Reuters

BEIJING, May 1 (Reuters) - China will further tighten quality controls on milk imports by demanding that overseas suppliers register with the country's quality watchdog before they are allowed to import dairy products, state media said on Thursday.

Exporting companies must first meet relevant regulations in their home countries to ensure that their health standards meet Chinese rules and laws, the official China News Service said, citing China's quality regulator.

"Corporate regulation management for foreign dairy producers who import will ... guarantee that imported dairy products sold in China meet Chinese food safety rules and laws from the source," the report said.

It said that the quality watchdog had already certified 1,122 foreign dairy producers, including 41 companies which make infant milk formula. Other companies, it said, would be added in time.

Companies not registed cannot import as of May 1, the report added.

Food safety has long dragged on China's domestic milk powder makers, boosting international brands in an infant formula market set to double to $25 billion by 2017, according to data from Euromonitor.

China has announced moves to consolidate the sector, supporting domestic "champions" who will be able to compete more strongly with global rivals.

Milk powder is a sensitive topic since a 2008 scandal involving milk tainted with the industrial chemical melamine killed at least six infants and left thousands ill.

That damaged the reputation of Chinese firms and boosted the market share of foreign brands such as Danone SA, Nestle SA, Mead Johnson Nutrition Co and Abbott Laboratories. Imported brands account for close to 80 percent of the infant formula market in major cities.

However, last August New Zealand's Fonterra said it had found a potentially fatal bacteria in one of its products, triggering recalls of infant milk formula and sports drinks in several markets, including China. Tests later found the initial finding was incorrect.

China's biggest milk powder makers include Inner Mongolia Yili Industrial Group Co Ltd, China Mengniu Dairy Co Ltd, Feihe International Inc and Heilongjiang Wondersun Dairy Co Ltd.

(Reporting by Ben Blanchard and Li Hui; Editing by Ron Popeski)

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