The infant formula industry is ushering in the second round of adjustments after formula registration.

Since the announcement of the new policy for infant formula in 2016, the number of domestic infant formula has dropped sharply from more than 3,000 to about 1,300 at present. It has been learned from many dairy companies that as the new national standard for milk powder is expected to land at the end of this year and the time is approaching the second registration, a new round of elimination in the infant formula industry will also be promoted. It is predicted that one-third of small and medium-sized brands will take the initiative or be forced to withdraw.

The milk powder industry faces a second elimination

Since the official website of the original State Food and Drug Administration announced the first batch of 89 registered milk powder formulas on August 3, 2017, a total of more than 400 series of 1300 infant formula formulas have been registered by May 2020. However, it has been learned by the reporter that since the single validity period of the registration of the formula is 5 years and three years have passed now, dairy companies are already preparing the second registration of the formula.

According to a person in charge of a foreign-funded dairy company, the approval time for the second registration depends on the State Administration for Market Regulation. Considering that the new national standard for infant formula is expected to be announced by the end of this year, a large number of dairy companies need to respond to the new national standard, coupled with the large number of companies, domestic companies may take a year and a half for secondary registration, and foreign companies may take more than two years to get it, so it is necessary to make early preparations.

From 2018, with the shrinking market caused by the reduction of the new birth population and the intensification of market competition, small-brand companies that have survive are making increasingly difficult operations. At the same time, they have to face the challenges of technology and cost brought by the new national standard. In September 2018, the National Health Commission organized the formulation of 9 national food safety standards (Draft for Comments), such as the National Food Safety Standard for Infant Formulas, and publicly solicited opinions. The Draft for Comments make stricter requirements for the selection of some ingredients and the range of nutrients in infant formula. The upgradation of the national standard has further accelerated the withdrawal of small and medium-sized milk powder companies to some extent. For example, some small factories use a dry process, but the new national standard has strict limits on the range of nutrients, the dry process is too precise to reach the requirement. In the Draft for Comments, the selection of milk powder ingredients is also stricter like lactose, causing that the small and medium-sized enterprises can no longer use cheap ingredients as alternatives and their formulas are forced to update, which will increase their costs.