by Marion Nestle
Jul 5 2013

China demanding fair prices for foreign infant formula

I’m shocked, shocked.  China says foreign makers of infant formulas are fixing prices (did you ever wonder why the prices of different brands of formula or baby food were all the same?).

Foreign milk powder surged in popularity in China after a 2008 scandal in which at least six infants died and 300,000 children fell ill after drinking domestic milk powder formula tainted with a toxic chemical, melamine. Virtually all major Chinese makers of milk powder were found to have tainted products..

Chinese newspapers say that since 2008, foreign milk powder companies have increased prices by around 30%. Since 2008, the market share held by foreign milk powder has doubled from 30% to 60%.

In response, two makers of infant formulas, Nestlé (no relation) and Danone, have promised to cut prices.  In the meantime, Chinese authorities are investigating price setting policies.

Some analysts see the inquiry as possibly part of a broader Chinese plan to increase consumption of local infant-milk products….Foreign brands may also soon have to rely on their Chinese partners if they want greater access to the Chinese market. The Chinese government has expressed an interest in bringing the supply chain under the control of Chinese firms as part of its goal of reducing the number of local infant formula producers to 10 from more than 200 within two years.

I’ve been writing about Chinese infant formula issues for years.

Breast-feeding, anyone?

  • Foodie

    I read and respect your opinions on nearly everything. I thank you for sharing them. You are truly a resource. I take issue with this article though.

    I tried like crazy with some kind of torture apparatus called and SNS and outwardly wept when my baby refused to take to the breast. I pumped her milk and bottle fed her my milk for a whole year until it all dried up. I pumped each meal and then fed her each meal. It took twice as long as regular feeding– 20 minutes of every two hours for pumping PLUS time for feeding baby! No matter how much energy I spent or how many unkind comments I overcame from co-workers and unsupportive family members, I was unable to support my baby entirely with my milk. I had to rely on formula to supplement. I get it that formula isn’t ideal, but it is necessary. I read your book about the Pet Food Supply chain and was frightened out of my mind about using formula. I used organic soy formula because the milk one made baby fussy. I worried and worried and worried about melamine.

    I had the pleasure of working in an office where I could pump milk. I somehow doubt that the slave-like conditions of the Chinese factories allow for breast pumping breaks.

    I wish it were so easy as to just say, “Breastfeeding, anyone?” But that is rather simplistic and perhaps a bit arrogant. Supply chain integrity is of immediate question, not judgement of those who need the products to be clean.

  • John

    China is capitalist heaven. Compared to China, America is a socialist paradise.

  • This is a very interesting article. First of all, I would like to know if there were sanctions given to those companies who used melamine in their milk formulas. Secondly, China is known for wide-scale piracy so who gives a s*%& about this? Lastly, let us promote breast feeding.

  • I live in Australia and last year we had a big shortage of Nestle formula as it was being bought by the Chinese!

  • I think the Chinese government must do drastic moves to guard the formula milk companies using melamine. If not, their economy will suffer since other countries will avoid more Chinese products.