The new policy on milk powder cracking down on ambiguous information: "imported milk sources", "ecological pastures" and other information will no longer be available | Methods | Milk sources
The registration of secondary formulas is in full swing, and regulatory authorities have once again raised the market competition threshold.
On July 10th, the State Administration for Market Regulation announced its interpretation of the new Measures for the Administration of Registration of Infant Formula Milk Powder Products. The new Measures have added provisions for the labeling and instructions of infant formula powder, requiring the use of vague information such as "imported milk sources" and "ecological pastures" to be prohibited. The new regulations will be implemented on October 1st of this year. In the industry's view, the new revisions will further highlight the competition in infant formula technology and innovation, and small and medium-sized brands will face a more severe survival environment.
The announcement shows that the new "Measures" have revised multiple contents, including clearly prohibiting disguised packaging and 8 situations of not registering, while refining the prohibitive requirements for labeling and instructions of milk powder products, and increasing the punishment for illegal activities.
Among them, the original "Measures" stipulated that labels and instructions must not contain six situations, such as involving disease prevention and treatment functions; Explicitly or implicitly having health benefits, etc.
The revised Measures have clarified 9 situations that cannot be included in labels and instructions, and added vague information such as "imported milk sources", "originating from foreign pastures", "ecological pastures", "imported raw materials", "original ecological milk sources", "pollution-free milk sources", etc; Do not use images of infants and women, such as "emulsification", "breastfeeding", or similar terminology; Other content that does not comply with laws, regulations, rules, and national food safety standards shall not be used, and situations that explicitly or implicitly have health benefits shall be listed.
Independent dairy analyst Song Liang told First Financial reporters that the regulatory authorities have implemented very strict regulations on product claims to avoid misleading consumers by companies. This "defect detection and filling" revision has further raised the threshold for the infant formula industry; On the other hand, this revision also encourages innovation in milk powder products and technology.
For a long time, infant formula milk powder has been a product of information asymmetry, and consumers find it difficult to intuitively understand the differences in product quality. Therefore, it is not uncommon to label products with the main concepts of imported milk sources and ecological ranches on the packaging.
This afternoon, a person in charge of a milk powder company told a reporter from First Financial that it is clear that these vague words will no longer be used on the packaging of milk powder cans. However, there are many offline promotional materials for milk powder companies, so it is not clear whether this part of management will be relaxed, but this also sends a signal of strict regulation.
The reporter noticed that in this interpretation, regulatory authorities also mentioned that in the background of revising the "Measures", the "Action Plan for Improving Domestic Infant Formula Milk Powder" clearly requires the improvement of formula registration management methods, combined with breast milk research results and market consumption demand, to support production enterprises in optimizing formulas, accelerating product research and development, and promoting the transformation and application of scientific research results.
In recent years, regulatory authorities have been raising the entry threshold for the infant formula milk powder industry and encouraging the market to shift from marketing competition to competition in technology and product innovation. The infant formula registration system implemented on January 1, 2018 is also considered the strictest new policy on infant formula in recent years.
When registering infant formula for the first time, the number of domestic infant formula brands decreased sharply from over 3000 in 2016 to 440 formula series by the end of 2020. Recently, due to the expiration or imminent expiration of the 5-year registration certificate, a large number of infant formula brands need to undergo secondary formula registration, which coincides with the implementation of the new national standard, further increasing the difficulty of registration. As of late June 2023, only about 59 dairy companies have registered 253 formula series.
Previously, Chen Ge, the President of Royal Netherlands Fisherland China, revealed in an interview with First Financial that the new national standard+secondary formula registration actually tests the comprehensive strength of milk powder enterprises. It requires the enterprise's research and development capabilities, production capabilities, inspection capabilities, supply chain management, internal collaboration capabilities, etc. to be "online". The tightening of secondary formula registration will also accelerate the industry's reshuffle, further increasing industry concentration.
