China Infant Formula: OEM Brands Invest Heavily in Infant Formula Plant Acquisition

After the January 1st 2018 infant formula registration deadline there will be great change in China’s infant formula market. Just over half a year remains to meet registration requirements. It is reported that many infant formula manufacturers have already submitted the application for recipe registration to CFDA. Chinese authorities have also began the process of auditing domestic infant formula plants, and the audit of overseas infant formula plants will be started in Q3. It is expected that the list of the first batch of registered infant formula recipes will be published soon in May or June.

Takehome:

China’s tough infant formula regulations are prompting many OEM brands to invest in the acquisition or construction of infant formula manufacturing facilities.

After the January 1^st 2018 infant formula registration deadline there will be great change in China’s infant formula market. Just over half a year remains to meet registration requirements. It is reported that many infant formula manufacturers have already submitted the application for recipe registration to CFDA. Chinese authorities have also began the process of auditing domestic infant formula plants, and the audit of overseas infant formula plants will be started in Q3. It is expected that the list of the first batch of registered infant formula recipes will be published soon in May or June.

However, besides these manufacturers, currently there are as many as 800-1,000 overseas OEM infant formula brands in the Chinese market according to the estimation of expert Wang Dingmian. As stipulated in “Administrative Measures for Registration of Infant and Young Children Milk Powder Formula Recipes” infant formula recipe registration applicants should be infant formula manufacturers with R&D, production and product testing capabilities.

Many OEM brands are now choosing to acquire or establish infant formula plants by themselves, especially in Australia and New Zealand. Overseas infant formula manufacturers must be audited and issued with a registered by CNCA prior to market entry in China. Passing CNCA manufacturing facility audit and then completing recipe registration before the Jan 1^st 2018 deadline is more or less impossible.

Moreover, according to “Detailed Rules for Examination on Production Licensing for Baby Formula Manufacturers (2013)”, infant formula manufactures must implement the Good Manufacturing Practice (GMP) standard for Powdered Formulae for Infants and Young Children (GB 23790-2010) together with HACCP, which is also a huge investment and tough challenge for these OEM brands.

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YICAI News Report