Chinese authorities will impose a ban on the import of dairy products from overseas companies that are not registered in China starting in May, a move analysts believe will strike a deadly blow to agencies that now play a major role in the supply of foreign baby formula.

The notice, which was issued by the General Administration of Quality Supervision, Inspection and Quarantine on Friday, said the authority will ban agencies from importing large packs of baby formula products and reselling them in smaller amounts.

Meanwhile, imported baby formula products must have labels in Chinese on the products, the notice said.

Imports of products without labels in Chinese or ones that fail to meet the requirements of labeling under Chinese regulations will be banned.

Baby formula products will also be banned from being imported if the date of quarantine inspection and expiration day is within three months.

Reshuffle of imports

Song Liang, a dairy industry analyst at the Distribution Productivity Promotion Center of China Commerce, said the move will bring a major change in the way baby formula is imported into the country.

"It will be devastating for purchasing agencies because the notice requires foreign baby formula product makers to register a Chinese branch before having their products on the shelf," he said.

Song said the new regulation means foreign dairy companies must produce products designated for the Chinese market only, which is bad news for purchasing agencies that generally buy only small quantities.

Chinese customers turned to foreign baby formula products after a 2008 scandal in which melamine - a poisonous chemical - was added to milk to make it seem richer in protein during quality tests. About 300,000 babies got sick from drinking the tainted milk and six died.

Song said the new regulation will help Chinese authorities trace the product quality of foreign milk powder products and enable customers to distinguish between fake foreign products and real ones.

As for domestic dairy producers, the influence will be positive if they take steps to seek their milk from overseas.

"Now confidence remains low in the domestic brands of baby formula products. If domestic companies could seize the opportunity and build dairy farms and plants overseas, the new regulation will put them on the same starting line as foreign brands," he said.

Ouyang Kaiyu, a 28-year-old father of a week-old baby in Beijing, welcomed the new policy by the authority because the new regulation means there will be more quality checks on foreign milk powder products.

"I am only concerned that the new regulation will increase the cost of foreign baby formula products, which will be transferred to customers," he said.

Zuo Yan, mother of a 3-month-old boy in Shanghai, said she might consider products imported to China after the new regulation is enforced, so long as they have the same recipes.

"One thing I am sure is that I will never consider domestic baby formula brands," she said.

Zhao Yinan contributed to this story.

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