Christopher Adams

The Business Herald’s markets and banking reporter.

Ministry works to allay Chinese concerns

Initiatives aim to address worries about rapid rise in Kiwi infant formula brands

Photo / Chris Miller
Photo / Chris Miller

The Ministry for Primary Industries says it's working on a number of initiatives aimed at addressing concerns in China about the rapid rise in the number of New Zealand infant formula brands available to Chinese consumers.

The statement, from the ministry's deputy director general for standards Carol Barnao, followed a call yesterday from the Infant Nutrition Council - whose members include Fonterra, Nestle and Synlait - for all companies involved in the marketing of baby formula to be required to comply with an agreed set of industry standards.

Council chief executive Jan Carey said New Zealand's reputation for high quality formula was being jeopardised by inexperienced companies looking to cash in on booming Chinese demand.

"Recent media reports have highlighted that companies that lack basic supply-chain integrity are threatening New Zealand's reputation as a producer of the highest quality infant formula and the industry and government agencies must work together to guard that reputation," Carey said.

Barnao said there were stringent requirements for anyone involved in the infant formula supply chain that ensured the safety of products.

"These rules give us confidence that New Zealand-made infant formula is safe for consumers regardless of where they are and what brand name is on the tin," she said.

But Barnao said the ministry was aware of increasing concern in China over the rapid growth in the number of New Zealand formula brands available to Chinese consumers.

"MPI is working with industry and other Government departments on a number of initiatives aimed at addressing these concerns," Barnao said.

"However, as we are working with other stakeholders to develop the initiatives around infant formula we can't talk about these initiatives in any detail until that process is complete."

China's 2008 melamine scandal, in which six babies died and around 300,000 became sick after consuming dairy products tainted with the industrial chemical, resulted in the virtual collapse of the country's domestic formula industry and a huge spike in demand for imported products.

With cans of foreign baby milk formula fetching up to $70 a piece in the Chinese market there has been an explosion in the number of brands being exported from New Zealand.

Most of the brands, which often have Chinese links, do not operate factories but instead have their products produced at contract manufacturing plants in this country.

As the Ministry for Primary Industries approves and regulates the contract manufacturers rather than the companies behind the brands, it has admitted that it doesn't know exactly how many brands are being produced in New Zealand for export.

The number is thought to be well over 200.

A series of critical news items broadcast in China by the state-run CCTV network last month focused on these kinds of brands, with one of the stories suggesting the contract manufacturing process made it difficult for the Chinese authorities to certify that the products were safe.

Another story suggested some brands that were produced in this country solely for export were claiming in their Chinese marketing to be well known in New Zealand.

One dairy exporter, who didn't want to be named, said the lack of regulation of formula brands was a "ticking bomb".

"It's a stacked deck of cards and if it all comes down everyone's going to get hurt ... "

Carey said New Zealand-made formula was "among the best in the world" and food safety regulations in this country and in China were strict and effective.

"The issues the industry is facing are around some claims that have been made and opportunists seeking exorbitant prices."

- NZ Herald

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