by Marion Nestle
Aug 12 2013

What’s up with Chinese infant formula?

I would never have predicted that infant formula, of all things, would become the poster child for the down side of globalization.  Look at all the issues:

Price fixing

The Chinese government has just fined six infant formula companies for fixing prices:

  • Mead Johnson (US): $33 million
  • Dumex/Danone (France): $28 million
  • Biostime (Hong Kong): $27 million
  • Abbott Labs (US): $13 million
  •  Royal FrieslandCampina (The Netherlands): $8 million
  •  Fonterra (New Zealand): $700,000

The fines may seem severe but the Chinese bought $12.7 billion worth of infant formula in 2012 and are expected to buy $18.4 billion in 2014.

Botulism contamination

Fonterra, the New Zealand manufacturer of infant formula contaminated with the type of bacteria that cause botulism, says it’s sorry.

We deeply apologize to the people who have been affected by the issue.

Food safety is our first and foremost interest.

That’s  what they all say when something like this happens.

The company noticed botulinum contamination in March but did not identify the contaminating strain or notify consumers until last week.  That’s also typical.

Fonterra made $15.7 billion in sales last year, more than half of it from selling dairy foods to China.  Other big customers are in Australia, Malaysia, New Zealand, Saudi Arabia, Thailand and Vietnam.

China has now stopped importing Fonterra’ powdered infant formula.  This alone was worth nearly $1.9 billion last year.

Recall that Fonterra was a part owner of the Chinese company that made infant formula laced with melamine—the formula that made more than 300,000 babies sick.  Six died.  That happened in 2008, with dire consequences for Chinese formula manufacturers.

Distrust of Chinese infant formula

Since then, the Chinese have become suspicious of local infant formula and are buying foreign infant formula to the point of scarcity.  The new scare makes that situation even worse.

In Hong Kong, officials have been cracking down on foreign infant formula smugglers.

Joe Nocera of the New York Times attributes the scandal to three problems with China’s rapidly expanding economy:

  • Complete lack of faith in Chinese companies.
  • Corner-cutting deeply ingrained in Chinese business culture, with no government regulatory enforcement.
  • Bad incentives.

He has a Slide Show to back this up.

Other consequences

Decline in breastfeeding.  Rates of breastfeeding in China are declining.  Do Western infant formula companies have anything to do with this?

Environmental Pollution.  I was at an agriculture meeting in New Zealand a few years ago and got an earful about what it means to convert a sheep-growing country to one focused on dairy cattle: pristine to polluted.

Alas, the externalized costs of globalization.

  • nicolebeth

    The western formula companies definitely have something to do with this. It is always a tragedy when infants die, but especially so when they die because the mom was convinced not to breastfeed (“here’s a free sample of formula, just in case your baby doesn’t seem satisfied” or images of “successful” western moms with their babies taking bottles). Here, in the US, women see formula vs. nursing merely as a “lifestyle choice”–they’re wrong, but at least their babies are less likely to die in infancy than those in third world countries.

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  • Sarah Moore

    I’m from New Zealand but I never want to go back there. I feel like the whole country has sold out.

  • Kelly Adams

    Well it looks like the West has finally found a product it can actually import into China. You would think that the Chinese could easily fix this problem internally, but from when I was there it sounds like they have a severe problem with enforcing any laws outside the major cities.

  • Yeezey

    Remember a major factor in declining breast feeding is increasing opportunity cost to stay home and breast feed the child. Its less about mothers being tricked into preferring formula my clever marketers and more about the need to get back to work.

  • chylene6599

    The whole baby formula industry is a rip. Ever see what goes into that stuff? And it’s so expensive!! I couldn’t believe how much it cost my daughter-in-law for one can of powdered formula for my grandson! I was a preemie 62 years ago, weighed 3.5 lbs. Back then, they had no “formulas”. I was in an incubator for 3 months, so Ma couldn’t breast feed, but she used the same formula all the Moms did back then: Evaporated milk, reconstituted with equal amounts of warm, boiled water. a quarter teaspon of dark Karo syrup. That’s it. Even back when my kids were little, you could still buy evaporated goats milk in case your baby had trouble with cows milk. Its more digestible, because it breaks down easier in the baby’s stomach. And, we all used cloth diapers. Not only was it a lot cheaper, but those diapers came in handy for tons of stuff and made great cleaning rags after the kids were potty-trained. Just use a mild soap like Ivory or Dreft, bleach, and use white vinegar in the rinse water.

  • InformedLawyer

    Mainland China’s food safety and environmental regulatory systems are severely compromised due to governmental corruption and non-enforcement, and because of the activities of unscrupulous profit-seeking Chinese manufacturing companies, including those operating in the baby foods industry. During the past 10 years, several cases of baby food poisoning have been reported as the result of Chinese infant formula companies cutting corners to make a profit.

    Chinese consumers are therefore rightly concerned about the safety of their infant’s and young children’s food, and have run across the border to Hong Kong which has a more secure and reliable regulatory environment and a better record of ensuring food safety. This has triggered hoarding of baby formula at Hong Kong supermarkets which has resulted in higher infant formula prices, which the Hong Kong and China pricing probes and recent settlement were intended to address.

    The botulism scare arose from a supply-chain problem/error of a major reputable New Zealand manufacturer/exporter of infant formula products. Fortunately, Australia-New Zealand’s shared regional food safety regulatory structure provides for supply-chain farm-to-table traceability which permitted New Zealand authorities to trace the batches of infant formula from the factory to their ultimate destinations.

    Due to unscrupulous Chinese owners of small newly established New Zealand infant formula companies that manufacture infant formula in New Zealand for purposes of only exporting to China, several shipments to China from New Zealand have raised Chinese food safety concerns. New Zealand’s infant foods industry recently pressed the New Zealand Gov’t to conduct a stem-to-stern review of their food safety system to identify the source(s) of this problem, and it has resulted, thus far, in the establishment of a new registry for all New Zealand infant foods companies. The Chinese Gov’t has used these food safety scares to highlight how even developed world food safety systems are not perfect, and to emphasize how it is working to improve the Chinese food safety system.

    Hong Kong has long had a decent food safety system, but has only recently extended it to infant formula, because most infant formula purchased in Hong Kong is imported from foreign country producers of major brands. The HK Gov’t incorporated these changes into part of the HK Draft Infant Formula Marketing Code which it is poised to adopt this year.

    The Draft HK Code, however, deals with much more than food safety matters. It imposes rather severe food safety-related and non-food safety-related restrictions on trade in infant formula and baby food products for the purpose of promoting breastfeeding, that exceed both UN Food & Agriculture Organization (FAO/WHO) Codex Alimentarius Commission food safety standards as well as WHO non-food safety-related standards, in violation of World Trade Organization (WTO) rules.

    In a three-part technical review of the WTO-compatibility of HK’s Draft Infant Formula Marketing Code published by LexisNexis, the US-based Institute for Trade, Standards and Sustainable Development (ITSSD) explains how & why the HK rules violate three WTO treaties. See: Hong Kong’s Draft Infant Formula & Complementary Foods Marketing Code Violates WTO Law, available online at: http://itssd.org/publications.html .

  • Bobby

    a lot of moms cant breastfeed! they have to use a formula of some kind to nourish their child. Do you know how many women have illnesses that render their breast a threat to their kids, or even cancer survivors, etc. there are a host of people outside your small world, who cant breastfeed even if they wanted too. and they don’t have access to a family milk goat! figure it out…

  • nicolebeth

    There are illnesses for which mothers can’t nurse–when on lithium, chemotherapy, anything radioactive, like the treatment that burns out one’s thyroid. Most conditions, however, aren’t incompatible with nursing. Many people who do have problems with nursing haven’t had educated support. There is a breast condition in which a mother doesn’t make milk; it’s quite rare, though I know moms who’ve had it. (Good support will identify this so the mom doesn’t feel like she’s doing it wrong or something.)

    Third world countries have many more issues with babies dying from exposure to bad water or from watering down expensive formula.

    I have been told that it’s a “mere” lifestyle choice. There are ways to feed formula safely. But, the information of the superior nature of breastmilk shouldn’t have to be hidden just to prevent “guilt”–if a mom chooses not to nurse, she should stand by her decision and be comfortable with it. And, as fellow parents, we shouldn’t judge one another’s decisions.

  • Bobby

    We’ve got to broaden our horizons ! What about aids moms, and cancer moms without breasts, hepatitis moms, hemophiliac moms(low blood counts/fatigue), syphilis moms, etc? Theres a butt load of real moms in the world, that aren’t cookie cutter, and they cant or choose not to breast feed. That’s cool. Considering the milk is only as healthy as the giver. And I know people are over-medicated, antibiotic’d down, GMO eating, and self-indulgent in the world today. We need to line things up from the top down unfortunately. Because theres nothing critical about the need to eat or feed someone.

  • TR

    The VAST majority of moms can breastfeed.
    Formula advertising has been proven to undermine mothers’ self-confidence. People like yourself don’t help either. You figure it out! I work in providing Lactation Support for breastfeeding moms.

  • TR

    Mom’s don’t need to be “cookie cutter” to be successful. Life is much more adaptive and resilient than your narrowmindeness sugggests. Moms do need to spend time with knowledgeable and supportive people, of which you definitely are not.

  • TR

    Powdered formulas also have bacteria in them. Statements from the companies state exactly that. None of the powdered formulas can be considered sterile.

  • TR

    I appreciate your intentions but actually it is more about mothers being tricked into thinking of formula as the one-size-fits-all solution to any and all breastfeeding challenges.

  • Bobby

    the vast majority? are we talking world-wide or nationally? I guess your lactation group is helping every middle/low income or poor health moms all over the nation, huh? nope. I thought so! moms have to make the best decisions they have with the options they have. singular minded people, like yourself, keep being ignored because your message isn’t helpful in any way, form or fashion!! It only further tells other women, whose shoes you could never fill, that you’ll never be an ally for them and what their personal lives as moms require. What worked for myself, may not fit another moms needs. So if I wanted to truly be helpful, I need to be flexible in finding healthy alternatives!! via, cheap organic powder baby formula/powder’d milk, assessable raw cow/goats milk, etc. but right now the nation doesn’t have enough of those options. it’s mostly breastfeed or gmo formula milk. I work with the CDC. I know what moms may be dealing with in their personal lives. I have seen the options given them, as far as feeding their babies. start passing out free breast-milk for a wider range income base and you’ll have a leg to stand on in this debate. but no ones holding their breath!

  • Bobby

    is your definition of a successful mom national or individual? because theres nothing more supportive than asking someone ‘what will work for you and your lifestyle, and how can I help you get it?’. but I wouldn’t expect a cookie-cutter to ever think that way!

  • Yeezey

    Formulas are extremely sterile, while they cannot have 0 bateria (Note 99% of human genetic makeup is microbial) the standards they reach on bacterial like B. cerus (<10 CFU/g) is impressive.

  • Yeezey

    What makes you say that – has there been any research done on marketing influencing breastfeeding?

  • Yeezey

    Openess includes considering formula as a neccessary tool support certain lifestyles in the world. I agree breast is best but it is not a one-size fits all solution.

  • Richard Leslie

    The western companies being greedy enough to move to China is there involvement.
    when china is buying up and producing 18.4 Billion dollars worth of formula in 2014 and the woman in china are buying foreign made formula not to mention the history of tainted formula like the 76 tons only one tainted with Melamine then western formula companies move to China ???
    all woman should check there breast milk before they feed due to all the other poisoning.