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Business
Print Edition> Business
UPDATED: June 11, 2012 NO. 24 JUNE 14, 2012
Struggling to Survive
Chinese infant formula brands are losing out to their foreign competitors due to lost consumer confidence following numerous scandals
By Zhou Xiaoyan and Xu Tao
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MODERN TECHNOLOGY: The modern milking facility of Inner Mongolia Yili Industrial Group Co. Ltd., a leading dairy manufacturer in China (ZHAO TINGTING)

Trying to recover

On May 27, the China Dairy Industry Association released a report on the quality of infant milk powder, pledging that the current security and quality of domestic dairy products and infant formula milk powder are in the best period of their history, after years of concerted efforts by concerned departments.

The Chinese dairy industry has seen a fundamental shift since the melamine incident in 2008. It has been cleaned up, the implementation of the licensing system has been rectified and product monitoring checks have also improved, said Song Kungang, head of China Dairy Industry Association.

Over 99 percent of randomly checked samples passed testing. Many efforts and new moves in the dairy industry have brought this change. First, the newly revised standard for infant milk powder is China's fourth-generation standard. It is technically advanced and also one of the most stringent standards in the world. Second, raw materials have been protected in quality and safety. In addition, advanced processing technology and equipment, perfect quality assurance system and improved national regulation have also provided support to the industrial change, according to the report.

However, whether Chinese consumers will ever trust domestic brands again remains to be seen. Experts suggest there are two methods to rebuild that trust: First, the standard of domestic infant formulas should be enhanced to meet the international level; and second, a more transparent and open supervision system must be established to give consumers more confidence in the long run.

While infant formula milk powder is produced and supervised as medicine in many other countries, China only takes it as an ordinary kind of food to produce and inspect. Therefore, many safety scandals occurred in the sector, just as in many other kinds of food. The infant formula milk powder deserves a higher standard in China.

Ding summarized the situation of China's infant formula milk powder as "the wrong national standard, wrong management system, wrong threshold for market entry, wrong label and wrong recall system for substandard products."

"I've been calling for the enhancement of the standard of infant formula milk powder in China for more than a year," said Ding Zongyi, Director of the Child Health Committee under the Chinese Medical Doctor Association. "China's standard for infant formulas has a long way to go to meet internationally applied standards."

"China's national standard for infant formula milk powder is too low. It doesn't require opinion of pediatricians. In terms of grasslands and cows, it doesn't demand a scientific management system. As for the later production processes, it only inspects it as ordinary food. The reasons for those safety incidents lie in the low standard and little cost for violation of the standard," said Ding.

Wang agrees with this idea. He criticized that China's standard for infant formula powder milk is the lowest worldwide.

"If the standard remains too low, consumers will turn to higher-standard foreign brands," said Ding.

Besides the widely criticized too low standard, the supervision system is another appeal for the improvement of the whole industry. Only by establishing a stricter examination system can consumers gradually begin to re-trust domestic brands.

Any industries concerning infants and toddlers should be heavily monitored. Consumers are most interested in seeing regular, specific and scientific supervision measures, including when concerned departments will make sample inspection on infant formula milk powder producers, who will be responsible, how many brands are involved, how many items should be examined and when the report should be released. The government disclose all misdeeds and corresponding punitive methods in time. Regular monitoring also means long-term, open and transparent release of information, especially when safety incidents occur in dairy giants, said China Business Daily.

Email us at: zhouxiaoyan@bjreview.com

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