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Official from New Zealand Ministry of Primary Industry Reveals the Registration of Dairy Manufacturers with China CNCA

1. The registration of overseas dairy manufacturers is an internal issue between the China CNCA, the dairy competent authorities and the producers. 2. To obtain successful registration and any subsequent changes such as addition of new brands must be communicated to CNCA via national dairy competent authorities. 3. Specific duration and procedures for registration are dependent on a number of factors, such as the complexity of the application form, China CNCA’s consideration and turnaround time among the three parties.

Benefiting from ideal pasture conditions, New Zealand supplies quality dairy products to the rest of the world. Dairy exports contribute a significant portion of the national revenue. Any factors affecting exportation command the full attention of both the NZ dairy industry and the government. As one of New Zealand’s most important global partners, China’s implementation of a mandatory manufacturer registration system for all overseas dairy manufacturers since 1 May 2013 is a priority concern. The lack of guidelines by the Chinese government and a number of uncertainties make the fulfilment of registration more difficult for all stakeholders. The Ministry of Primary Industry (MPI) of NZ has responded efficiently to China’s new rules in order to minimize the negative effect on its dairy industry brought about by the new regulatory barriers. Early in Dec 2013, MPI issued a specific guidance for its domestic infant formula manufacturers to fill out the application form required by CNCA and also developed a new Overseas Market Access Requirement (OMAR) that sets out the requirements manufacturers must meet to produce infant formula for export to China from 1 May 2014. As of the 31st of Jul 2014, 8 infant formula manufacturers and 151 other general dairy manufacturers have successfully obtained approval and with several more awaiting approval thanks to the joint efforts by MPI and New Zealand manufacturers. ChemLinked Food Portal was lucky enough to have an exclusive interview with Brad Young, Senior Communications Adviser of the MPI and get valuable insights on manufacturers' registration. 

ChemLinked: How long on average does the approval process take from start to finish?

MPI Brad Young: It’s not possible to assign an average length of time for infant formula manufacturers to be registered with CNCA, as it depends on a number of factors such as the complexity and volume of information contained in a manufacturer’s application for registration, whether additional detail is sought once CNCA consider the information in it and any work associated with MPI conducting verification audits of manufacturers. It also depends on the time taken for CNCA to consider an application for registration.

MPI and the Ministry of Foreign Affairs and Trade are continuing to engage directly with their Chinese counterparts to progress the registration process for the remaining manufacturers.

ChemLinked: If a manufacturer fails audit how long will it take before they can get re-audited?

MPI Brad Young: As background, MPI developed a new Overseas Market Access Requirement (OMAR) that sets out the requirements manufacturers must meet to produce infant formula for export to China from 1 May 2014. MPI then audits the manufacturer to determine if they meet the OMAR.  Verification audits are a normal part of MPI’s work to support New Zealand companies to produce safe, high quality, dairy and food products.  Manufacturers must comply with the OMAR, and New Zealand’s regulatory requirements in order to produce infant formula for export to China. The length of time for a re-audit is very much dependent on how quickly a manufacturer can resolve any issues identified by the initial audit.

ChemLinked: What type of problems commonly causes manufacturers to fail CNCA audit and what rectifications are most commonly required?

MPI Brad Young: Just to clarify, all general dairy and infant formula manufacturers visited as part of CNCA’s ‘sample’ audit in March 2014 were registered from 1 May 2014 to export product to China. As such, the CNCA audit was not a pass/fail process.

On the basis of the CNCA ‘sample’ audit, 150 premises general dairy manufacturers and 5 infant formula manufacturers were registered from 1 May. Following adjustments to the register on 4 July, there are now 152 registered general dairy manufacturers.

A further three infant formula manufacturers of retail ready infant formula were registered in July 2014 by CNCA, taking the total to eight. The registration of these additional New Zealand manufacturers was a positive step forward, and demonstrates that other New Zealand manufacturers have a pathway towards registration for the Chinese market.

We continue to work with six New Zealand infant formula manufacturers on their registration process and as part of this process have now conducted verification audits for all of the manufacturers to ensure they comply with the OMAR (mentioned in our response to question 2).  MPI and the Ministry of Foreign Affairs and Trade are also continuing to engage directly with their Chinese counterparts to progress the registration process for the remaining manufacturers as soon as possible.

ChemLinked: What are the general procedures for a New Zealand Infant Formula Manufacturers to apply for approval by China CNCA? (General procedure, timeline etc., costs etc.)

MPI Brad Young: In order for MPI to recommend a manufacturer for registration with CNCA, the manufacturer must hold a Risk Management Programme (RMP) approved by MPI under the Animal Products Act 1999. The manufacturer must also comply with New Zealand’s Overseas Market Access Requirements (OMAR) for China.

As noted in the response to question 2 above, MPI oversees the audit of infant formula manufacturers against the OMARs for China. The administrative cost for processing a recommendation for registration to CNCA is recovered from businesses through dairy industry and exporter levies.

CNCA has developed a registration application form which must be completed by manufacturers. CNCA does not apply a fee for assessing an infant formula manufacturer registration application.

The details of each manufacturer’s registration process are confidential between MPI, the manufacturer and CNCA.

All registration decisions are the responsibility of CNCA. MPI cannot take responsibility for the registration decisions of an overseas authority.

ChemLinked: How many infant formula manufacturers have failed CNCA audit in New Zealand? How soon will CNCA experts return to NZ to reassess manufacturers that fail audit?

MPI Brad Young: Please see our response to question 3.  As mentioned above, MPI carries out the verification audits.

ChemLinked: When a manufacturer fails China CNCA site audit for the first time? How can MPI help?

MPI Brad Young: Please see our response to question 3.  MPI and the Ministry of Foreign Affairs and Trade are continuing to engage directly with their Chinese counterparts to progress the registration process for the remaining manufacturers as soon as possible. This includes working with the relevant Chinese agencies to provide all necessary information on our system as part of the registration process—and to ensure that the unique elements of the New Zealand dairy and infant formula industry are well understood by the Chinese authorities.

ChemLinked: How many NZ infant formula manufacturers are awaiting approval?

MPI Brad Young: We continue to work with the remaining six manufacturers on their registration process.

ChemLinked: Has China’s increased infant formula regulatory requirements had a significant negative effect on NZ infant formula exports?

MPI Brad Young: Changes in market access requirements for any market can impact exports in the short term due to uncertainty and changes in market dynamics. We expect this to be the case for the infant formula export industry.

ChemLinked: Are there any existing approved manufacturers applying for modification of their application form to include more infant formula brands? Does the manufacturer directly contact China CNCA for alteration or through MPI? What is the procedure?

MPI Brad Young: Any changes that could affect a manufacturer’s registration must be communicated to the relevant Chinese authorities for consideration via MPI.

Information relating to brands is provided to MPI on a commercial in-confidence basis, and as such it wouldn’t be appropriate for us to comment on this.  Decisions on brands are commercial decisions for businesses to make.  MPI is not involved in these commercial decisions.

ChemLinked: According to application forms MPI has received from approved manufacturers, what is the average number of brands included in the application forms and what type of deviation/range do you usually see from this average? 

MPI Brad Young: The registration process is confidential between MPI, the manufacturer and CNCA. Indicating average numbers would impact on this confidentiality for individual operators. Prior to 1 May 2014, New Zealand companies produced around 150 infant formula brands. As producers and exporters adjust to the new market access requirements we expect the number of brands made by manufacturers to substantially decrease.

ChemLinked: Since MPI facilitates (the middle man) manufacturer registration issue, how does MPI rate the Chinese governments (CNCA, AQSIQ)’s work performance, efficient? transparent?

MPI Brad Young: The new rules signal China’s desire for greater accountability for imported infant formula from all countries. We recognize and share China’s commitment to ensuring the safety of infant formula.

The relationship with China is in great shape, and holds genuine promise for further improvement over the coming years. We are appreciative of and value Chinese officials’ efforts to date.

Compliance advice

Manufacturers that still have no idea on how to get approval from China CNCA and anyone planning to establish a new dairy factory are strongly recommended to contact the competent authorities in your own countries for detailed compliance procedures. 

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