Peter Duggan, Strategic Information Services, Bord Bia - Irish Food Board

Over the past few years China has been faced with a number of food scares which has resulted in the Chinese public becoming concerned over the quality of local produce. This is highlighted in a recent Bloomberg report, which showed that since 23rd April when new laws restricting how much infant formula can be carried into China came into force, Hong Kong customs have arrested 879 people carrying an average of 9kg of formula each.

Meanwhile the first packaging run of the new A2 Platinum infant formula was viewed by China State Farms chair Xu Jun this April. China state farms will distribute the infant formula in China on behalf of A2 and Synlait (who have been working in partnership with on the venture for the last 18 months), due to their experience in agricultural supply chains. Marketing of A2 infant formula will initially concentrate on the following:

• Tier 1 and 2 cities
• Maternity stores rather than supermarkets
• Three different products suitable for different ages from newborn to toddler will be launched at the same time.

Distribution of A2 infant formula will be become more widespread once the Chinese learn about the benefits of A2 milk, as covered in a previous Food Alert. Synlait report that A2 milk from their certified herds would grow to become 8% of the company’s supply this year. While the market for this product looks niche at the moment, the underlying market fundamentals suggest that demand for this product will be buoyant with the Chinese retail market currently valued at $6bn set to double by 2016 according to Dairy Reporter!