The right formula for China

Fewer companies are being registered to export infant formula to China, but growth in the sector is continuing to forge ahead.

ANZ economist Con Williams said the value of New Zealand infant formula exports to all countries had grown by 40 per cent since 2010, and he predicted it would top the $1 billion-a-year mark soon.

In a survey by the Mintel research company, more than half (57 per cent) of Chinese mothers thought products from New Zealand and Australia were better than those from other countries, compared with 32 per cent for northern Europe and 28 per cent for North America.

China, which imports an overwhelming proportion of the New Zealand product, has tightened up on the numbers of companies allowed to sell infant formula. In response to safety scares, in 2015 the Chinese Government decided to regulate what was described as a ‘‘Wild West’’.

There are now 13 New Zealandbased manufacturers registered to export infant formula to China, down from a high of about 200. They have to follow a two-step process, firstly having their canning plants registered, and then their infant formula recipes.

They include big names such as Fonterra, Synlait, Nutricia and Yashili, but also niche businesses such as NIG Nutritionals and the Dairy Goat Co-operative, both of which sell goat infant formula.

From January 1, China will require all manufacturers who export infant formula to China to have their infant formula recipes registered with the China Food and Drug Administration (CFDA).

Synlait, Fonterra and Yashili are the first New Zealand manufacturers to have their infant formula recipes registered.