Reporter Xu Jie trainee reporter Li Jing

  Three nutrition and special dietary food standards (hereinafter referred to as "new national standards"), which have attracted much attention, including "Infant Formula Food" (GB10765-2021), will be officially implemented on February 22. How is the formula registration of major milk powder brands?

What impact will the implementation of the new national standard have on enterprises and industries?

  With these questions in mind, a reporter from "Securities Daily" interviewed a number of milk powder companies. All interviewed companies said that their products have completed the registration of the new national standard. Toddler formula returns to the essence of formula.

  China Dairy Analyst Song Liang told the Securities Daily that the implementation of the new national standard will have three impacts on the milk powder industry: First, the implementation of the new national standard means that the best quality milk powder will be launched one after another, and consumers can buy it in China Higher-quality milk powder; second, the application threshold for the new national standard is relatively high, and some brands have given up applying for registration, which has further promoted the increase in market concentration; third, the launch of new national standard products is conducive to the price stability of infant formula milk powder.

  Milk powder enterprises to speed up the pace of registration

  On March 18, 2021, the National Health Commission issued three standards: "Infant Formula Food" (GB10765-2021), "Older Infant Formula Food" (GB10766-2021), and "Children's Formula Food" (GB10767-2021). The minimum and maximum limits of nutrients in formula milk powder for infants and young children have been revised and supplemented, and the addition of sucrose in formula milk powder for infants and older infants has been clearly restricted.

  "The new national standard has clearer requirements on the accuracy and completeness of nutritional elements added to milk powder, and puts forward higher requirements on the raw material selection, supply chain, production process, R&D and production stability of infant formula companies. , It will also raise the entry threshold of the industry again." Yin Pengfei, a senior investment consultant of East Hi-Tech, said in an interview with a reporter from "Securities Daily".

  The new national standard proposes that formula milk powder produced after February 22, 2023 must comply with the new national standard and be re-registered by the Center for Food Evaluation of the State Administration for Market Regulation (CFE-SAMR).

It is reported that after the introduction of the new national standard policy, many dairy companies have accelerated formula upgrades and passed the registration of the new national standard.

Now, approaching the official implementation of the new national standard, the completion of the registration of major brands has once again become the focus of attention in the industry.

  On February 15, the Food Approval Center of the State Administration for Market Regulation announced the latest batch of "Infant Formula Milk Powder Registration Approval Documents (Decision Letter)". 50 types of formula milk powder, including Duo, Mead Johnson Lanzhen, and Jinlingguan Ruihu, have passed the registration of the new national standard.

According to statistics, as of February 15, 2023, 316 formulas of 112 brands under 31 dairy companies have obtained the new national standard registration.

  The new national standard is considered to be the "most stringent standard in history" for domestic milk powder, which prompts related companies to enter a new stage of development centered on quality improvement.

Xu Sa, Chief Scientist and Innovation Officer of Mead Johnson China, said that the new national standard registration puts forward higher requirements for the company's research and development capabilities and the scientific nature of the formula, which will drive China's infant formula to return to the essence of formula.

  Junlebao told the "Securities Daily" that the company has made relevant preparations for the upgrade of the new national standard very early, and Junlebao Banner milk powder is the first batch of products in China that have passed the registration of the new national standard.

  "All the products sold by Wyeth have passed the registration of the new national standard. The registered products cover 7 series and 21 formulas of Wyeth Qifu Yunchun, Wyeth Qifu, Wyeth S-26 Yingcui and Wyeth Zhenlang. The person in charge of Wyeth told the "Securities Daily" reporter.

  Beingmate told the "Securities Daily" reporter that the company established a special working group two years ago to cooperate with the work related to the new national standard. At present, all factories have been advancing in an orderly manner according to the original plan.

Health & Happiness Group also stated that its subsidiary Biostime's application for new national standard infant formula registration has been progressing in an orderly manner.

  Industry concentration is further enhanced

  After visiting a number of maternal and child stores, a reporter from the Securities Daily learned that among the domestic milk powder currently on sale, milk powder such as Feihexing Feifan and Yili Jinlingguan have completed product updates, and the products on the shelves are all in line with the new national standard products, but some imported milk powder did not update the product.

  The sales staff told the "Securities Daily" reporter that it has been two months since Feihe and other products have been updated, and other imported brand milk powder will launch new products one after another, but it is not known when the new products will be released.

"Currently, the milk powder of the old national standard has not been notified of removal from shelves."

  "The inventory of milk powder brands such as Feihe and Junlebao is basically low at present. The company has cleaned up a lot last year. It is expected that with the gradual emptying of old national standard products and the launch of new national standard milk powder, the quality of milk powder products will be further improved." Song Liang express.

  It is understood that the new national standard will further increase the entry threshold of the industry. While China's infant formula industry is ushering in a new stage of quality upgrading, it is also accelerating the reshuffle of the industry.

Haitong International analysts said in the report that after the implementation of the new national standard secondary registration system in February 2023, some brands that cannot pass the new national standard will be cleared. It is estimated that manufacturers that cannot pass the new national standard account for about 10% to 15% of the Chinese market. The share corresponds to sales of 16 billion to 24 billion yuan.

  Zhu Danpeng, a senior researcher at the China Food Industry Research Institute, told the Securities Daily reporter that the implementation of the new national standard has initiated the reshuffle and structural upgrade of China's infant formula milk powder industry, and it is also the prelude to a new level of corporate competition.

  "This means that milk powder companies will re-develop new formulas according to new requirements, or upgrade existing formulas, transform production technology, modify packaging and then re-register. Higher requirements are put forward, the milk powder industry will reshuffle again, and some brands may be eliminated." Yin Pengfei said.

  Cinda Securities believes that, referring to the market conditions in developed countries such as Europe, America and Japan, the implementation of the new national standard is expected to further increase the concentration of my country's infant formula milk powder industry, which will benefit leading companies in the industry.