Global Food

Background introduction

In recent years, infants and young children formula milk powder products has received much concern in China. According to official statistics, there are 103 infants and young children formula milk powder production enterprises in our country with more than 2000 brands in total, and 77 overseas infants and young children formula milk powder production enterprises registered by Certification and Accreditation Administration with more than 300 brands. There are less significant differences among many products. Some OEM factories even produce for different brands with the same formula. In order to standardize the domestic infants and young children formula market, and ensure the safety of infants and young children formula milk powder, the “Administrative Measures for Product Formula Registration of Infants and Young Children Formula Milk Powder” approved by China Food and Drug Administration Affairs Meeting was published on June 6, 2016, and has taken effect form October 1, 2016. The Measures defined that the formula registration shall be uniformly implemented for domestic and overseas infants and young children formula milk powder products. After January 1, 2018, the formula milk powder that hasn’t certified by formula registration is forbidden to sell in China regardless of being from the traditional channels or electric business channels.

The process, time period and general contents of formula registration

The Measures can be called as the most stringent laws and regulations in the history, which makes strict restrictions on the qualification conditions of applicant, limits the number of formula, and requires that each production enterprise shall has not more than nine product formulas of three recipe series in principle. In order to optimize the production capacity of enterprises and meet the needs of the market, the Measures allows the wholly-owned subsidiary of the same group to use the product formula registered by another wholly-owned subsidiary of the group company.

CFDA has set up administrative acceptance authority, food appraisal authority, and audit & inspection authority to separately review the registration materials and on-site conditions. From the submission of information to receive the formula registration certificate, it needs 6 months at least if all goes on well. According to Foodmate.net, more than 50 (domestic enterprises are the most) have submitted the registration application at present, and none of them has received the certificate of registration.

The registration materials include 10 items as followed: 1. Application for product formula registration of infants and young children formula milk powder. 2. Supporting documents of applicant subject qualification. 3. The quality and safety standards of raw materials and auxiliary materials. 4. Product formula. 5. R & D report of product formula. 6. Instruction of production process. 7. Product inspection report. 8. Supporting documents of R & D capacity, production capacity, and inspection capacity. 9. Other supporting documents indicating the scientificity and safety of formula. 10. The manuscript of label and instruction as well as the instruction and supporting documents of claim thereof.

Business challenges

Time Challenge: If it is not completed before January 1, 2018, the market in China may be lost;

Registration Challenge: The requirements for registration materials are rigorous, such as nutrition study (sufficient scientificity and safety basis of formula), stability study (overseas companies face greater challenges compared to domestic ones), and different languages ​​(compliance and fluency of translation), etc..

Challenge of understanding on laws and regulations: differences in thinking caused by differences in region, and differences on the understanding of the design, logical structure, and the specific display form of the materials.

Challenges of timely accessing to effective information: such as the registration interpretation frequently held in China, the latest policies issued at the official website of government (laws & answers and Q & A, etc.), expert meetings (intelligence of internal expert) and the registration training organized by officials and so on.

The status of the market after implementation of the Measures

According to the estimation of Foodmate.net, the brand of infants and young children formula milk powder in the Chinese market will be reduced to less than 600 from more than 2300 in the future if it is calculated on the basis of the domestic and overseas production enterprises obtained the production license.

Our suggestion

As whether the enterprises can continue to operate in China or not will be influenced by the formula registration this time, Foodmate.net suggests that all the work this year shall be focused on the formula registration. On the one hand that the production can only be processed after obtaining the registration; on the other hand that amendment and improvement can be performed by the chance of registration to find the problems existed in the production and operation of enterprises.

As the relevant documents of the CFDA have not been fully issued, it is suggested that enterprises shall pay close attention to the current information of the CFDA on the one hand, and seek assistance from the appropriate third-party advisory service agencies on the other hand, reflect the problems arising from the implementation of the registration system and appeals of enterprises through reasonable channels, and influence the formulation of the policy by certain manner in order to take the initiative.