china INFO sheet: Infant formula

Document Sample
china INFO sheet: Infant formula Powered By Docstoc
					  CHINA INFO SHEET: INFANT FORMULA
  Market Overview
  China has a well-established dairy industry of its own, however, local preference remains for
  imported infant formula. Demand is such that Chinese companies are informally aggregating infant
  formula stocks from supermarket shelves in importing countries and are clearing formula stock in
  Hong Kong and Taiwan.
  According to the China Dairy Association, China's high-end infant formula market has been
  growing at over 30 percent per annum. Preparations for infant use (milk/ starch, cereals and flour)
  worth US$604.5 million were imported in 2010, with foreign brands occupying over 70 percent of
  the high-end formula milk powder market.
  The most common packaging for new products in the Chinese market is multi-laminate, followed
  by metal cans and metalized film.
  The leading companies in the Chinese infant formula market in 2008 were Groupe Danone
  (leading brand Dumex), Bristol Myers Squibb Company and Wyeth, with Fonterra in fourth position.
  Four Chinese companies make the top 10 providers list, ranked from 7 to 10: China Mengniu
  Dairy; Inner Mongolia Yili Industrial Group; Guangdong Yashili Group; Ausnutria Dairy (Hunan).

   Chinese Imports 2010
   Product             Value ($NZm)                 Growth 09/10             Main Competition (2010 % share)
   Infant                                                                    Singapore (37%), New Zealand (18%),
                               183                        35%
   formula                                                                   Australia (15%), Netherlands (9%)
   Milk                                                                      New Zealand (82%), Australia (6%), United
                             1,577                       102%
   powder                                                                    States (3%)
  Market Drivers
  As wealth in China increases, the market for infant formula is expected to increase. However,
  quality control remains an issue in the domestic market. The China Daily reported in March 2011
  that at least 20 percent of local dairy companies (accounting for about 10 percent of the market),
  will have their licences revoked following Government relicensing inspections, which were
  imposed to restore consumer confidence.
  Market Potential
  Datamonitor estimates that the infant formula market in China was worth US$1,664.7 million, and
  will grow at a rate of 2 percent (CAGR) between 2010 and 2014. However, other sources suggest
  that growth could be as high as 18.7 percent annually over the next four years.


Disclaimer: This publication is provided to you as a free service and is intended to flag to you market opportunities and possibilities. Use
of and reliance on the information/products/technology/concepts discussed in this publication, and the suitability of these for your business
is entirely at your own risk. You are advised to carry out your own independent assessment of this opportunity. The information in this
publication is general; it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database
sources. NZTE; its officers, employees and agents accept no liability for any errors or omissions or any opinion/s expressed, and no
responsibility is accepted with respect to the standing of any firm/s, company/ies or individual/s mentioned. New Zealand Trade and
Enterprise is not responsible for any adverse consequences arising out of such use. You release New Zealand Trade and Enterprise from
all claims arising from this publication. New Zealand Trade and Enterprise reserves the right to reuse any general market information
contained in its reports.
  Regulatory Issues
  Companies wishing to export dairy products from New Zealand must be registered with the
  Ministry of Agriculture and Forestry (MAF) in accordance with the Animal Products Act, 1999.
  Exporters must ensure that exported animal products comply with both New Zealand regulatory
  requirements and those of the importing country. MAF issues the export certificates which are
  required by many importing countries, including China, to ensure that exported products are safe
  and suitable.

  On the importation side, variations are common in the regulatory requirements for imports into
  China due to different interpretations, influences, implementation procedures at the local
  level. This is especially so in the category of formulated milk powder products which is has
  become subject to arbitrary changes as the Chinese government tightens controls on food safety.
  Exporters should work with their local distributor to understand local interpretations and
  requirements regarding compliance.

  The governing agency for the registration of food product labels is the Chinese food quality
  inspection agency, known as CIQ (Customs Inspection & Quarantine). To register, the importer or
  authorised agent needs to prepare a full translation of information on the product, its nutritional
  information and the name of the manufacturer etc. Also required is a 3-dimensional graphic
  design of the label as it would appear on the product to be sold.

  To import dairy products, the importer or authorised agent must have an “automatic import-export
  licence” issued by the China Chamber of Commerce for Foodstuffs and Native Produce. This
  licence must be filed with CIQ to enable the CIQ to issue its own licence. Both licences together
  are needed to import dairy products, with the import codes specified.

  Especially for new businesses, experience suggests China regulatory requirements cannot be fully
  understood or managed remotely from New Zealand. We suggest that, as the next step, the
  exporter uses the information here as a guideline to what is required locally and puts this to its
  distributor or agent (or potential distributors or agents if the selection process is still underway) and
  gets them to complete the picture and give detailed advice.


  Distribution Channels
  Datamonitor projects that just over half of distribution is through independent retailers (54 percent),
  22 percent through supermarkets, 19 percent through pharmacies, and 4 percent through
  convenience stores.

Disclaimer: This publication is provided to you as a free service and is intended to flag to you market opportunities and possibilities. Use
of and reliance on the information/products/technology/concepts discussed in this publication, and the suitability of these for your business
is entirely at your own risk. You are advised to carry out your own independent assessment of this opportunity. The information in this
publication is general; it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database
sources. NZTE; its officers, employees and agents accept no liability for any errors or omissions or any opinion/s expressed, and no
responsibility is accepted with respect to the standing of any firm/s, company/ies or individual/s mentioned. New Zealand Trade and
Enterprise is not responsible for any adverse consequences arising out of such use. You release New Zealand Trade and Enterprise from
all claims arising from this publication. New Zealand Trade and Enterprise reserves the right to reuse any general market information
contained in its reports.
  Market Entry Strategies
  With demand for infant formula the levels it is currently in China, the first questions exporters
  should ask themselves is whether they have sufficient supply to meet the demand of potential
  distribution partners.
  Distributors play a key role in the penetration of imports into the retail sector. A capable distributor
  can assist with regulatory issues and network relationships, while providing logistic services. To
  effectively target the retail sector in China, New Zealand exporters will need to have a good
  distributor who has established supply relationships with top-end retailers. New Zealand exporters
  are strongly encouraged to undertake due diligence on potential partners. Areas to investigate
  include, but are not limited to, registration with the Bureau of Industry and Commerce, company
  cash flow, facilities, credibility and expertise in the food and beverage industry.
  Regular market visits are highly recommended for the purpose of testing the market, evaluating
  potential partners, visiting facilities, listening to end users and developing good relationships in the
  industry. Remember that China is not a single market. Geography, demographics, tradition and
  incomes vary from region to region and your activities will need to reflect this.
  Further Information
  For information or advice, visit www.nzte.govt.nz, phone 0800 555 888, or speak with your client
  manager.

 PUBLICATION/GUIDE                                                                   WEBLINK
 Navigating China (NZTE Publication)                                                 www.nzte.govt.nz
 Doing Business in China (NZTE Webpage)                                              www.nzte.govt.nz
 Food and Beverage to China (Austrade Webpage)                                       www.austrade.gov.au
 Gain Guides (USDA FAS)                                                              gain.fas.usda.gov
 General Administration of Quality Supervision, Inspection                           english.aqsiq.gov.cn
 and Quarantine of P.R.C.




Disclaimer: This publication is provided to you as a free service and is intended to flag to you market opportunities and possibilities. Use
of and reliance on the information/products/technology/concepts discussed in this publication, and the suitability of these for your business
is entirely at your own risk. You are advised to carry out your own independent assessment of this opportunity. The information in this
publication is general; it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database
sources. NZTE; its officers, employees and agents accept no liability for any errors or omissions or any opinion/s expressed, and no
responsibility is accepted with respect to the standing of any firm/s, company/ies or individual/s mentioned. New Zealand Trade and
Enterprise is not responsible for any adverse consequences arising out of such use. You release New Zealand Trade and Enterprise from
all claims arising from this publication. New Zealand Trade and Enterprise reserves the right to reuse any general market information
contained in its reports.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:89
posted:8/30/2012
language:English
pages:3