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On March. 12, 2019, China’s baby food company Beingmate announced that one of its wholly owned subsidiaries obtained an FSMP production license[1] for its lactose-free infant FSMP. This is the first FSMP production license issued by State Administration for Market Regulation (SAMR).
Delays in Release of Detailed Rules for FSMP Production License Stymie Domestic Interests
The revised Food Safety Law[2] launched in 2015 kicked off management of FSMP. It requires relevant stakeholders to obtain a registration certificate and a production license before putting their FSMP into mass production. Administrative Measures for Registration of Foods for Special Medical Purpose[3] and some other related regulations[4] were enacted in 2016 and 2017. However, Detailed Rules for FSMP Production License[5] was not issued until February 2019.
On February 13, 2018, one year before Beingmate was granted its FSMP production license, it obtained a registration certificate for its lactose-free infant FSMP. The manufacturing was delayed due to lack of production permission. Among 24 registered FSMP, 5 are registered by Chinese domestic enterprise[6]. The other domestic registered FSMPs are still awaiting government approval before production.
Overseas Enterprises Dominate Market by Exploiting Policy Advantage
Unlike domestic FSMP enterprises, overseas counterparts do not require a production license. Internationally manufactured FSMP can be sold after they are registered. This is a major advantage compared to their Chinese competitors.
Early in June 2018, Nestle Institute of Health Sciences worked with Renhe Pharmacy to sell its FSMP directly to target population[7]. At present, it is in collaboration with over 1000 hospitals nationwide. Market sales of Nestle Institute of Health Sciences grow at an annual growth rate of over 50%. As of March 7, 2019, ABBOTT has registered 6 infant FSMP. It will run an independent ecommerce store for its special formula foods[8].
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