29 Apr 2014

New rules threaten formula exporters

5:44 pm on 29 April 2014

New Zealand's infant formula manufacturers could be stopped from sending fresh product to the Chinese market from Thursday and the Government doesn't know how long that could continue.

All companies wanting to export formula produced from 1 May will need to be registered with authorities in China and some manufacturers warn the process could take months.

Nutricia infant milk formula on sale in Beijing. Its manufacturer Danone is suing Fonterra over loss of sales due to the botulism scare.

Danone's Nutricia infant milk formula on sale in Beijing. Photo: RNZ / Demelza Leslie

Roger Smith of the Ministry for Primary Industries said one of the new rules was that brands and manufacturers must be closely associated.

Speaking from Beijing, Mr Smith said neither the ministry nor the industry were sure what that meant and were seeking clarification.

"I know industry are calling out for a black and white checklist that they can go through but that is not something that we have at present and not something we're expecting."

Mr Smith said some manufacturers will have to make big capital investments to be able to meet the new standards but others have already fulfilled the requirements.

His job was now to give the information to Chinese authorities to show the requirements had been met. He did not know how long the authorities would take to give approval.

Last week the Government said about 90 percent of the product now exported would be able to meet the new standards.

A large manufacturer, Canterbury-based dairy company Synlait Milk, said it needed to make some minor changes to its processes, that could take two to three months, to regain export approval for product manufactured after 1 May.

However managing director John Penno said it would not be too disruptive long term. "China is an important market - it's the biggest infant formula market in the world and we've been able to position the business for these changes."

Mr Smith said the situation is the same for every country exporting to China. "Everybody's working through the same process," he said.

Government need to demand answers

The Labour Party says the Government needs to demand answers from China on how New Zealand manufacturers can get approval to export infant formula there.

Labour's primary industries spokesperson, Damien O'Connor, says the Government promised the registrations would be sorted quickly, but time is running out.

He says companies need some certainty around what they need to do to get their product approved for China so they don't risk being locked out.