Lactalis Sets Sights on Infant Formula to Chinese Market

Lactalis Sets Sights on Infant Formula to Chinese MarketMay 27 – France-based Lactalis Group, the world’s largest dairy maker by sales, announced on Friday that it would introduce a baby formula brand to the Chinese market.The company won approval from the Certification and Accreditation Administration of China in April. Now, it plans to export high-end infant formula products under the Celia brand to markets in southern China.

It will expand nationwide in the near future, it said. Two Celia products that are entirely made in France will be sold in China, said Jiang Xia, general manager of China for Lactalis Group. “Along with the high-quality brand, we are also promoting a healthy nutrition and care approach for Chinese parents,” Jiang said. The company will expand its sales channels by opening e-commerce services for Chinese consumers. “If we find there are safe and qualified milk sources, we also plan to build a production base in China,” Jiang added.

Brigitte Joseph, director of sales for the overseas nutrition business of Lactalis, said booming demand from Chinese consumers for high-quality infant formula provides a solid base for the company to increase its presence in the world’s biggest market. “China is one of the markets that have priority in our global strategy. We are determined to promote high-quality infant formula to Chinese parents,” she said.

The company estimates the value of the market in China at 100 billion Yuan ($16 billion), With China having introduced new regulations on May 1 to streamline imports of dairy products, domestic dairy enterprises, especially infant formula producers, are bracing for intensified competition, according to Wang Dingmian, director of the Guangzhou Dairy Association.

More than 1,000 overseas dairy producers, 41 of which make infant formula milk powder, have received entry approval from Chinese authorities, according to the Xinhua News Agency. Demand for imported milk soared after 2008 when some Chinese suppliers were found to have added melamine, an industrial chemical that can cause kidney damage and other injuries, to infant milk products. In 2013, overseas milk powder brands held 54 percent of the market in terms of value, Xinhua reported.

In the first two months of 2014 alone, Chinese consumers bought some 301,000 metric tons of milk powder, up 79.3 percent from a year earlier, according to Xinhua. Under the new rules, foreign dairy companies must ensure their products comply with China’s safety standards and are registered with the General Administration of Quality Supervision, Inspection and Quarantine. “The move is a fresh effort by the Chinese government to further regulate the country’s dairy market for better product quality and weed out the unqualified products, especially fake foreign brands that are actually from local makers,” said Wang. For “China Dairy Industry and Market Report 2013-2015”available upon request, contact with DCCC, or mail to: info@dccchina.org