New Zealand's booming infant formula industry fears Chinese regulatory changes could block smaller operators from doing business in the world's most lucrative and fastest-growing baby milk market.
And Ministry for Primary Industries officials have warned infant formula makers of potential export constraints when auditors from China's Certification and Accreditation Administration arrive in this country to inspect seven manufacturing facilities - including factories operated by Fonterra - this month.
More than 100 small-scale baby milk brands were created in New Zealand in the wake of China's 2008 melamine scandal, which drove a surge in Chinese demand for imported formula as parents panicked about the quality of domestically made products.
But there are concerns in the industry that our biggest trading partner may cut the number of New Zealand brands allowed into the Chinese market to 10, or that only brands with retail sales in this country will become eligible for sale in China.
Kelvin Wickham, Fonterra's president for greater China and India, said the tougher regulations meant companies would need "sufficient scale" to stay in the Chinese infant formula market.
The Chinese auditors' visit, which is unrelated to Fonterra's botulism false alarm, comes ahead of a requirement that all manufacturers be registered with the Chinese Government by May 1.