China’s Dairy Sector: Market, Technical Requirements and Opportunities

Market, Technical Requirements and Opportunities for EU Producers

China is one of the world’s largest dairy markets and certainly the largest importer of dairy products. Although a series of demand and price disruptions impacted the market in 2022, experts expect China’s dairy sector to stabilise in 2023 and return to growth in the following years. A key driver of the market is the increased health awareness of Chinese consumers.

This offers opportunities to European dairy producers, although the competition from other traditional dairy exporters regions is fierce. Furthermore, the image of domestic dairy products has gradually recovered after undergoing various incidents and scandals that occurred in the past. At the same time, EU dairy producers will need to navigate through a series of complex technical requirements – and barriers – in order to be allowed to export to China.

Our new report aims to guide EU dairy producers through the process, while highlighting elements that can be leveraged on.

China’s Dairy Sector Report Contents

The first chapter provides an overview of the Chinese dairy market. It highlights how Chinese people’s increased health awareness and the initiatives of Chinese authorities are driving the development of the market, and in particular domestic production. We provide a detailed analysis of dairy imports into China for various dairy segments, with EU dairy products leading in some categories but lagging behind in others. We also present the most popular retail channels available in China.

The second chapter provides a detailed overview of the regulatory and technical requirements for importing dairy products into China. It focuses on issues such as country protocols and eligibility, GACC/CIFER registration for production establishments, as well as heightened requirements for infant formula. You will find in this chapter details on food safety standards as well as labelling standards. The last section of this chapter provides an analysis of rejected imports by customs and the main reasons for rejection in the last year.

The third chapter summarises a series of tips and recommendations for European dairy exporters approaching the Chinese market. It also includes some of the unique elements that EU producers can leverage. We list the dairy products protected under the EU-China Geographical Indication Agreement, as well as the funding opportunities at the EU level. In this chapter, we also go into considerations on intellectual property protection.

Finally, the last chapter illustrates the key findings from interviews conducted with 8 dairy industry professionals in China. This section includes insights from local importers, distributors, producers, as well as retailers.

***UPDATE – JULY 2023***

On 10 July 2023, SAMR released the revised Administrative Measures of Product Formulation Registration of Infant Formula Milk Powder, which will enter into force on 1 October 2023. Compared to the previous version illustrated in the EU SME Centre report, these revised guidelines will:

• Expand the legal basis for rejecting the registration of infant formula products. For example, when the application materials submitted are untrue or fraudulent, when the scientific and safety basis of the product formula is deemed as not sufficient, or when the applicant is considered not to have the R&D, production or supervision capabilities necessary for ensuring the product quality and safety . 
• Expand, from 6 to 9, the elements that cannot be specified on product labels and instructions, such as the use of vague and fuzzy statements including “imported milk source”, “derived from foreign pastures”, “ecological pasture”, “imported raw materials”, “original ecological milk source”, “pollution-free milk source”, etc. Images of babies and women cannot be used, together with wording such as “human emulsification” or “mother emulsification”. 
• Include cases in which on-site inspection of production establishments may be required. For instance, in case of major changes in the product formula, in the address of the production facility, or in any case further verification is required by the technical evaluators. 

Click here to access the revised measures in Chinese on SAMR’s website.

More on the Dairy Market in China

The Cream of the Crop: Exporting Dairy to China
Watch this webinar to get tips on exporting dairy to China, marketing, consumer tastes, and other aspects of the sector. Understand how to register with the General Administration of Customs of the People’s Republic of China (GACC) and how to prolong or renew your certification. This event also features a presentation on trademark registration before entering the Chinese market and other aspects of IPR protection.