China to boost domestic dairy companies

The Ministry of Industry and Information Technology (MIIT) has finished a draft to promote mergers and acquisitions of infant formula companies.

According to the draft, the ministry will foster the growth of large dairy companies over the next five years and aim to cultivate three to five companies each with an annual sales revenue exceeding 806 million U.S. dollars by the end of 2018.

The total number of infant formula companies will be reduced to around 50.

The move aims at developing the global competitiveness of domestic infant formula companies and improving the quality of infant formula.

The State Council, China's cabinet, has required that the quality of infant milk powder be strictly supervised under drug regulations.

On June 18, the MIIT summoned 127 milk powder producers to a meeting and told the companies to improve the quality of infant formula and restore customers' trust.

There are a total of 127 infant formula companies in China with a total annual output of 600,000 tonnes. Only three companies have an annual output of 30,000 tonnes or more.