In a very encouraging report, Reuters news agency covered a story regarding the growth in interest of Chinese companies and consumers in European and Irish supply, which has been taken up by press outlets around the world.
The reported stated that Chinese infant formula giant Beingmate prints Irish clovers on its flagship product as it seeks to assure Chinese parents of its European sourcing after a safety scare involving the world’s biggest milk powder exporter, New Zealand.
The report is reproduced here, and cites executives and parents who spoke to the journalists in preparation for the article:
Until last year, formula from New Zealand was seen as the gold standard for quality in China, where food scandals are common and the deaths of at least six babies from locally made milk powder in 2008 preys on parents’ minds.
This reputation, however, was tarnished after New Zealand dairy conglomerate Fonterra said some of its products could have been tainted by bacteria.
Although the scare turned out to be false, it prompted formula firms to cut supplies from New Zealand and trumpet Europe as their source.
“Sentiment, for now, has swung from New Zealand towards Europe,” said a China-based executive at a large multinational infant formula firm.
He said a “Europe” tag now gave products added cachet for consumers.
Giving Chinese consumers what they want will help global and local firms expand in the world’s largest market for infant formula, where sales are expected to double from last year to $31bn (€25bn) in 2017, consultants Euromonitor say.
Milk formula is also a gateway into China’s wider dairy market, estimated to become the world’s biggest by 2017.
European companies like Glanbia in Ireland, Denmark’s Arla Foods and Dutch dairy FrieslandCampina have lined themselves up to capitalise on this growth, especially as European Union caps on milk production will end next year, freeing up more capacity for export.
The proportion of infant formula imports from New Zealand halved to 9pc in the first nine months of this year compared to the same 2012 period, Chinese industry data shows.
Fonterra accounts for the bulk of New Zealand’s dairy exports New Zealand remains China’s biggest source for base milk powder, the raw ingredient used to make dairy products including formula, but Europe, Australia and the United States are gaining ground.
Several Chinese parents told Reuters they now buy formula sourced from the US or Europe instead of New Zealand.
“After the Fonterra issue, I took all the brands affected by the scare off the list,” said Xu Yong (28), a civil servant who now buys Dutch-sourced formula for his baby. “I choose based on safety concerns.” Global and Chinese infant formula firms have taken note.
Abbott Laboratories, which recalled products in China over the Fonterra scare, says on its China website that it sources its formula from Ireland, Spain and Denmark.
There is no obvious mention of New Zealand.
Beingmate says its premium Green Love+ is sourced and produced in Ireland.
21 Nov 2023