First drop in China’s infant formula imports since 2008

China’s infant formula imports have dropped for the first time since 2008, according to data from China Customs. Imports have fallen from 122,734 tonnes in 2013 to 121,320 tonnes in 2014.

The drop appears to be a result of a number of factors, most notably the August 2013 ‘Fonterra Botox incident,’ which saw Fonterra recalling several batches of whey powder contaminated with potentially harmful bacteria. Despite the fact that the products were later found to pose no risk to consumer health, the Chinese government imposed restrictions on New Zealand dairy imports that were only lifted in October 2014.

Another contributing factor was China’s introduction of a new registration system for companies wishing to export infant formula to China. Research from CCM reports that while initially around 800 foreign infant formula brands were supplied in China, by the end of May 2014 when the new registration system was introduced, only 115 foreign brands had been granted export licenses by the General Administration of Quality Supervision, Inspection and Quarantine. By December 2014 this number had risen to 255.

It’s not all doom and gloom, however. Despite import figures declining over the whole year, imports from Ireland and the Netherlands actually increased 223% and 34% respectively. In fact, imports had actually increased by 24% year-on-year in Q1 2014 which suggests that the new restrictions were to blame more so than a drop in consumer confidence. A more calculated conclusion can be drawn once the Q1 2015 figures are made available.