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Current as of 19/09/14 10:20AM NZST

Christopher Adams

The Business Herald’s markets and banking reporter.

China baby food story upsets NZ exporters

Photo / Thinkstock
Photo / Thinkstock

A stoush has erupted in the lucrative infant formula export industry after Chinese media outlets published articles stating the only "genuine" New Zealand-made formula brands were those belonging to members of a newly formed export association.

Six firms belonging to the New Zealand Infant Formula Exporters Association - which was formed late last year with plans to develop an accreditation process for "approved" Kiwi brands - attended the Beijing Mother and Baby Expo this month and hosted a media event during which members of the group gave a presentation to Chinese journalists.

A story subsequently published on the website of the English language Global Times, which cited China's 21st Century Business Herald as its source, said that out of 200 infant formula brands sold in China that claimed to be made in New Zealand, only 20 brands from six firms - all members of the association - were genuine.

Many Kiwi infant formula manufacturers, including Auckland's New Image, Canterbury dairy processor Synlait and Fonterra - which will begin selling its own brand of formula in China later this year - are not members of the group.

Guy Wills, general manager of New Image, which exports infant formula to China, said the company was dismayed that a small, private association thought it could go to China and speak for the entire industry. "The action of this association has caused confusion among the Chinese media and led to some authentic New Zealand brands being removed from the retail shelves [in China]," Wills said. "That is not only damaging to the non-association members, but also to New Zealand dairy's reputation."

But the group's chief administration officer, Chris Claridge, said it never stated that only six New Zealand producers were exporting genuine product.

"[The media coverage] was a gross misrepresentation of what the association said and did in Beijing," said Claridge, who is also the managing director of Christchurch-based formula exporter Carrickmore.

"Our membership has 13 members - why on earth would we claim that there are only six members who are genuine brands?"

Michael Wan, marketing and communications manager for Synlait, which makes formula sold in China by its majority shareholder Bright Dairy, said the company was concerned about the damage the Chinese media coverage could cause to the reputation of New Zealand-made infant formula products in China.

Ministry of Primary Industries deputy director-general Carol Barnao said the ministry had been in contact with its Chinese counterparts and Chinese media to "clear up any confusion".

China's formula trade

• Total retail market estimated to be worth US$6 billion in 2011.

• Projected to double by 2016.

• New Zealand formula brands sell for up to $70 a can in Chinese supermarkets.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

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