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China will continue to drive global infant formula sales – Euromonitor

By Mark Astley , 04-Dec-2012
Last updated on 04-Dec-2012 at 15:46 GMT2012-12-04T15:46:33Z

China will continue to drive global infant formula sales – Euromonitor

Chinese consumer demand for infant formula products looks set to continue to drive global sales, according to Euromonitor.

According to a post on the Euromonitor website, China Still Driving Global Milk Formula Sales, the $12.4bn Chinese infant formula market “continues to hold the fate of global baby milk formula in its hands.”

The market for infant formula in China is expected to increase to approximately $25bn by 2017 – driven in part by an increase in the number of working Chinese women, and their reluctance to breastfeed.

Speaking with DairyReporter.com, Euromonitor’s head of food research Lee Linthicum attributed the continuing increase in demand to a combination of birth rate and growing consumer preference for powdered milk.

Nutritionally better?

“China has a population of more than 1bn, which inevitably means a lot of babies,” said Linthicum.

“It’s a combination of birth rate and the substitution of breast feeding for packaged infant formula milk. This has been strengthened by the belief that infant formula is nutritionally better than breast milk.”

Euromonitor expects the infant formula category to “expand strongly” in spite of China’s one child policy.

China’s one child policy was established in 1979 in an effort to limit the country’s population growth. It limits ethnic Han Chinese couples living in urban areas to one child. Twins, rural couples, ethnic minorities, and parents without siblings are exempt from the policy.

Linthicum added that while the one child policy still stands, it has become more relaxed in a sense.

“The one child policy has been relaxed in terms of the fact that people can now afford to pay the fines. Ironically, the one child policy has created something referred to in China as ‘Little Emperor Syndrome’, which has supported infant milk formula sales in China,” Linthicum added.

Import demand

Despite the continuing increase in demand for these products, dairy safety is still an issue for many Chinese consumers.

In 2008, six children died and around 300,000 people were sickened after consuming Chinese-manufactured milk powder that had been contaminated with melamine. Imports of milk powder have increased dramatically as a result.

In the short term, western dairy processors will continue to benefit from this aversion to domestically-manufactured infant formula products, according to Linthicum,

“In the short term, the melamine crisis is still an issue for consumers,” he said.

"Infant formula imports will be massive in the short term, as it has been since 2008. This is not going to change anytime soon.”

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