Analysis: New rules set to shake up China's shrinking infant formula market

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China's introduction of the world's strictest nutrient standards for infant formula are likely to see scores of brands give up on a market that is shrinking along with the country's falling birth rates, industry executives and analysts say

New rules imposed in February force infant formula makers to invest heavily to re-make, test, certify and re-register their products for China, before potentially conducting new marketing campaigns., with bigger domestic and international brands likely to increase their market share as smaller ones exit, analysts said.

Many experts describe the regulations as the world's toughest, aiming to get as close as possible to breast milk. “The government needs to show Chinese people that ‘we care about babies, we care about food safety so much that we come up with the strictest formula regulations’,” said Auckland-based Jane Li, who has been involved in the China infant formula market for more than a decade and acts as principal consultant for Li, Page & Co.

The process requires many "resources from designing a new formulation, to trial, analysis and registration as well as good documentation and factory inspection."

 

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