Rising trend started after 2008 formula scandal
BEIJING - China's milk powder imports have surged more than fourfold since 2008, when themelamine-tainted baby formula scandal was exposed, pressing hard on domestic milk powdermanufacturers.
Statistics released by the General Administration of Customs on Friday show that milk powderimports to China set a new record each year since 2008. The number surged to 414,000 tonsin 2010, tripling that of 2008. In the first three months of this year, 166,000 tons were imported.
This year is likely to be the first in which more than half of the milk powder sold on the Chinesemainland is foreign, industry experts estimated, after domestic and foreign producers split themarket 50-50 last year.
"Based on current momentum, the foreign brands will surpass domestic ones this year, andthey will take at least 60 percent of the baby formula market," Wang Dingmian, chairman of theGuangzhou Dairy Association, told China Daily over the phone.
As much as 600,000 tons of milk powder could be imported this year, he said.
The rise in imports is harming local businesses. Milk powder producers in many parts of thecountry, including Heilongjiang province and the Xinjiang Uygur and Ningxia Hui autonomousregions, have reported having an excess of stock and price wars with foreign brands.
"Sluggish sales and overstock have continued since 2008, which has weakened not only localenterprises but also big domestic brands," said Zhao Shuming, secretary-general of the NingxiaDairy Industry Association.
Zhao said a ton of imported milk powder generally costs 3,000 yuan ($470) more than domesticmilk powder. "So the Chinese manufacturers have to keep their prices low to compete withforeign brands," he said.
Moreover, imported milk powder has been noticeably attracting consumers in rural areas inaddition to its monopoly in the urban market, especially regarding baby formula products.
Li Hailong, a native of the rural Shijiazhuang city, Hebei province, who works in Beijing, mails acan of imported milk powder back home every month for his 14-month-old son.
"I saw reports saying this country has the world's lowest quality standards in the dairy industrywhen it comes to bacteria count and protein content. But we want the best for the kid," said 28-year-old Li.
He said he is no exception. "I learned to do it from a fellow villager. We'll prefer higher-qualityproducts as long as we can afford them," he said.
Many parents in big cities shun buying products with domestic milk powder for their children.
"Consumers have been hurt by a string of dairy scandals, from melamine-tainted baby formulaincidents to 'leather milk' (milk containing a substance extracted from leather scraps)," said LiXiaoxing, a 32-year-old Beijing mother who has stuck to a Japanese brand for her 19-month-olddaughter.
"I don't know any young parents who buy domestic milk powder for their kids. It's even very rarefor parents to buy foreign brands produced in China," said Chen Zhen, a Shanghai residentwho has an 8-month-old son.
Dairy industry experts said it will take at least three years for domestic brands to reverse theyear-on-year rise in import volume and win back their customers.
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