Dealing in white powder usually involves cocaine. In China, there are big bucks to be made in infant formula too. Some internet resellers stock up to $130m of foreign baby milk powder. Beijing wants to increase self-sufficiency by 28 per cent to at least 60 per cent of total sales. Success or failure will show whether the Chinese trust indigenous businesses with their dearest asset: their children’s health.
The fast-growing middle class have little faith local producers adhere to food standards. For good reason: in 2008, adulterated local milk took the lives of six babies and sickened more than 300,000.
If China can wean consumers back on to homegrown infant formula, it would hit foreign groups that have benefited. Shares in Australian milk suppliers, such as a2, Bellamy’s and Bub’s dropped steeply this week. Nestlé and Danone also participate in China’s $27bn baby formula market. Scale and diversity protected their shares.