China increases supervision of formula sector

China increases supervision of formula sector

Chinese regulators have again signalled their intention to increase oversight of infant formula production in a bid to improve safety standards and build public confidence.

The Chinese State Food and Drug Administration called on infant formula manufacturers to improve their production safeguards and reporting practices, while local regulators should step-up surveillance.

"A lack of responsibility, unclear policies and lax supervision led to recent safety issues over infant milk formula, and it is necessary to improve the quality and safety of milk powder to regain consumer confidence," the agency said in a notice released today (9 August).

The regulator stressed the need to detect safety issues early and prevent them from spreading down the supply chain and impacting finished products.

Local authorities should adopt policies of "active prevention" and "early intervention", the Administration suggested.

Reform of safety standards in the infant formula market was kicked off in June, when nine government bodies - including the country's Food and Drug Administration - united in an attempt to standardise and reorganise the domestic infant formula sector. Tighter controls, including more stringent product certification and the oversight of product make-up, were introduced.

The Administration today insisted that local food safety bodies must not be allowed to "slack off" or "relax". The reform of regional food safety institutions must include strengthened organisational leadership and regulatory responsibility, the safety watchdog added.

For its part, the national authority said it would increase its "risk investigation work" by "strengthening routine monitoring, supervision and sampling". Companies found to breach safety regulations should be "promptly" and "severely" dealt with in accordance with the law, the Administration said.

The responsibility of food companies to ensure the safety of their products was stressed and manufacturers were urged to improve quality and safety control measures, rooting out "lax management".

Chinese consumer confidence in infant formula manufactured in the country was largely undermined by a 2008 safety scare, when formula contaminated with melamine resulted in the deaths of six babies and sickened thousands more.

Since then, demand for foreign-made formula has increased and international manufacturers have increased their share of the market. According to government statistics, prior to 2008, foreign companies accounted for around 30% of formula sales. This has risen to 50-60% of sales and up to 80% of the premium market.

However, foreign manufacturers have also been in the spotlight. Last week, Danone and Abbott Laboratories were forced to issue recalls in China after it emerged that some of their products were linked to whey protein supplied by Fonterra and contaminated with a bacteria that can cause botulism.

International manufacturers were also the subject of a recent antitrust probe conducted by the National Development and Reform Commission. The NDRC probe drew in almost all the leading international formula makers operating in China, including NestleMead Johnson, Danone, FrieslandCampina, Abbott Laboratories and Japan's Meiji. Hong Kong-listed Biostime and Chinese firm Beingmate were also examined by the regulator.

The NDRC found the companies guilty of fixing prices in the market and issued fines totalling CNY669m (US$109.3m), the largest antitrust ticket in China's history.