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China wants domestically made baby formula to supply 60% of market

Baby milk formula are displayed inside a medicine store in Hong Kong February 1, 2013. REUTERS/Bobby Yip

BEIJING (Reuters) – China aims to increase local production of baby formula so that more than 60% of the market can be supplied domestically, according to a document jointly released by the country’s central planner and several ministries.

The document, dated in May but released on Monday, said production of domestic baby formula is increasing, there is more consumer confidence in domestic formula, and Chinese brands are getting more competitive globally.

Chinese parents switched heavily to buying foreign brands after a domestic 2008 tainted-milk scandal, when several infants died after the industrial chemical melamine was added to milk powder to raise protein levels.

The document was jointly stamped by the National Development and Reform Commission and six other ministries, including the Ministry of Commerce and Ministry of Industry and Information Technology.

It didn’t say when it expected China to reach the 60% target.

The document also called for further consolidation and restructuring within the industry to eliminate outdated capacity and equalize product quality.

The push to expanded domestic sources comes as international food groups, such as Nestle, launch new lines of baby formula targeting smaller cities in China.

Domestic infant and toddler formula accounted for 43.7% of the Chinese market in 2018, after production grew 21% that year, data analytics firm Nielsen said in a report in March.

Reporting by Pei Li and Brenda Goh; Editing by Neil Fullick

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