The Government has announced a wide-ranging plan aimed at strengthening and protecting the country's "food assurance systems" to match rapid growth in infant formula exports.

New Zealand's baby milk industry - which exported around $600 million worth of product last year, according to Food Safety Minister Nikki Kaye - has grown rapidly in the wake of the 2008 Chinese melamine scandal as demand for imported brands skyrocketed in China.

But the sector has had a rocky ride this year with China's state-run CCTV news network broadcasting a series of critical stories about Kiwi formula products that raised questions about manufacturing processes and false claims some brands, which had links back to Chinese businesspeople, were making in their marketing in China.

Kaye said she had asked the Ministry for Primary Industries to conduct a "work programme" that includes:


- An audit of New Zealand's existing regulatory regime around infant formula to identify any areas for improvement, including work on verification, compliance and testing regimes.

- Ensuring that New Zealand's Overseas Market Access Requirements (OMARs) keep pace with changes being introduced in Chinese regulations for infant formula.

- Investigating mechanisms to better collaborate and communicate with markets in Asia, particularly China, in areas such as science and labelling.

The Ministry for Primary Industries introduced a brand register for infant formula manufactured in New Zealand earlier this month.

Kaye said that change was aimed at enhancing consumer confidence and ensuring the integrity of New Zealand branded products in the Chinese market.

"New Zealand's infant formula exports are estimated at about $600 million a year, with approximately $170 million of that going to China," Kaye said. "Export assurances are particularly important for infant formula exports where consumers have strong concerns about food safety, quality and product integrity ... New Zealand's reputation around the world as a leading producer of safe and trusted food is extremely important to our competitive advantage as exporters. As the food sector accounts for 54 per cent of our total export value, we take this very seriously and this work will be on going."

Westland Milk Products chief executive Rod Quin, whose firm is New Zealand's second biggest dairy co-operative after Fonterra, told the New Zealand Herald this month that some serious issues in this country's formula trade needed fixing, not least brands produced at contract manufacturing facilities passing themselves off in China as "reputable New Zealand dairy processors".

"We've traded on a safe and secure supply chain and high quality dairy products for many years and these guys chasing short-term opportunity put a lot of that at risk," Quin said.


In one of the CCTV items, broadcast last month, a journalist visited the Auckland address provided on the cans of a New Zealand-made baby milk brand, called New Bay Bay, which is sold in Chinese supermarkets.

The address turned out to be a panelbeater's yard in Great South Rd and staff at the business had no knowledge of the infant formula firm.

China's People's Daily newspaper reported that CCTV also sent a can of New Bay Bay for testing by the Chinese import authorities, who found the product had selenium levels below Chinese standards.

The Chinese Government announced a set of new rules governing its infant formula trade last week, which include shutting down domestic formula manufacturers that can't guarantee the quality of their raw milk and prohibiting the bulk importation and repackaging of infant formula in China.

Foreign baby milk makers will have to register with the Chinese authorities before exporting product to the country and infant formula will soon be regulated in the same way as pharmaceutical products, with an electronic tagging system introduced in order for the production process to become more traceable.

China's new leadership, which took power in March, has its sights set on rebuilding the country's domestic infant formula industry that was decimated by the 2008 melamine crisis.