(Adds detail on size of China's infant milk formula market)
By Clare Baldwin and Diana Chan
HONG KONG Aug 22 A Chinese retailer is offering
insurance to customers who buy infant milk powder, highlighting
the lengths to which companies are going to address concern
about food safety in China.
Suning Commerce Group Ltd, which owns the
Redbaby chain of stores, told Reuters it had launched the policy
this week, backed by China's second largest insurer Ping An
Insurance Group .
The policy stipulates that if a brand of milk powder is
recalled, customers who bought cans from any Redbaby store or
its e-commerce website would be paid up to 2,000 yuan ($325) per
can, with payments capped at 100,000 yuan.
"In recent years, the milk powder market in China has been
in a mess," Suning said in an email.
"We realised that parents pay a great deal of attention to
their children's health and safety, and in particular, the
safety of their infants' foods," it added. Insurer Ping An said
Suning's policy is the first of its kind in China.
Concern about the safety of baby milk powder came to the
fore in 2008 when thousands of infants fell sick and six died
after an industrial chemical was added to raise the apparent
protein content of certain products.
Pharmacies in Hong Kong, where food safety regulations are
perceived to be more stringent, saw a run on infant milk formula
following the scandal and many Chinese people still travel into
the city, a special administrative region of China, to buy it.
Regaining trust in China could be worth a lot. The market
is expected to reach $17.8 billion this year, according to
Suning said it was giving the insurance away for free for
the first 40,000 cans of baby formula sold. After that,
customers can buy the insurance online.
According to its e-commerce site, Redbaby stocks milk
formula from multinationals including Mead Johnson Nutrition
, Nestle SA, Danone SA as well as
brands made by China's New Hope Nutritional Foods Co in
partnership with New Zealand's Synlait Milk Ltd.
Along with detailed nutritional information, the website
also highlights the expiry date of each can of formula.
Food safety remains a major concern in China. This week,
U.S. foodmaker H.J. Heinz Co was forced to recall some of its
infant food products because they were found to contain excess
levels of lead.
KFC parent Yum Brands Inc, McDonald's Corp,
Wal-Mart Stores Inc and Fonterra Co-operative Group Ltd
have also recently faced food safety scares.
($1 = 6.1543 Chinese yuan)
(Additional reporting by Donny Kwok in HONG KONG and Adam
Jourdan in SHANGHAI; Editing by Miral Fahmy and Robert Birsel)