December 25, 2013 / 8:10 AM / 6 years ago

China tightens infant formula rules in food safety drive

SHANGHAI, Dec 25 (Reuters) - China will further toughen milk powder regulation next year as it moves to boost confidence in domestic producers and allay long-standing fears around food safety in its $12.4 billion infant formula market.

Milk powder firms will need to apply for a new permit under the toughened rules by the end of May next year, the China Food and Drug Administration said in a statement on its website, which was carried by state media on Wednesday. The food regulator will then release a list of approved producers.

“The new rules harden the conditions for milk powder makers to obtain a permit. Importantly this will raise safety and quality control in the sector, raw material quality, production processes and traceability,” it said.

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 more 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.

The new regulations will see more stringent inspection and testing of milk powder products, with specialised teams working with producers to enforce the rules.

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 Adam Jourdan; Editing by Kazunori Takada and Paul Tait)

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