Under New Zealand law, only registered exporters can export dairy material, including products such as infant formula.
Recently, investigations by MPI and Customs revealed a rapid growth in the amount of unlawfully exported infant formula, primarily to China, and valued at NZ$150mn and growing.
Action to protect Kiwi standards
“We appreciate some people may not be aware that they have been operating outside the law and we are taking steps to inform and educate during this process,” Glen Neal, food and beverage manager at MPI, said.
MPI and Customs have together sent letters to wholesalers, freight forwarders, supermarkets and known exporters advising that action is being taken to stop this unlawful export trade.
“Our action is about protecting the confidence New Zealand’s international trading partners have in our system of standards for exports, and at the same time ensuring a level playing field for all exporters in New Zealand,” he added.
“MPI is talking to known exporters to give them the opportunity to either stop trading or investigate ways to export infant formula lawfully,” he said.
Size of the problem a concern
The New Zealand Food & Grocery Council (NZFGC) has declared its support for the crackdown.
Katherine Rich, chief executive of the NZFGC, said that the level of the illegal exports was of concern.
“Infant formula is an extremely sensitive product category for many reasons, and any failure by a New Zealand company potentially poses a threat to New Zealand’s international reputation as a supplier of safe, reliable, and quality food products,” said Rich.
“Infant formula provides a significant economic opportunity for New Zealand. Exports grew from NZ$63m in 1999 to NZ$753m in 2009. This product category continues to offer significant opportunities for market growth,” she said.
“But it’s a market that needs to be treated responsibly. New Zealand cannot afford to allow its reputation for safe and quality food to be compromised, putting any of these exports at risk,” she said.
Startups risking it for NZ
Rich said that she completely understood that there is a growing market for trusted infant formula in China, and New Zealand is well placed to deliver products that meet the needs of concerned Chinese parents.
“But servicing this market on a commercial scale requires the absolute strictest adherence to all food safety and export laws. Though food safety is paramount, how infant formula is marketed by New Zealand companies also requires dedicated attention,” she said.
According to Rich, there have been too many local examples in the past few months of start-up infant formula companies breaching the Infant Nutrition Council’s Code and making fundamental mistakes with their marketing.
“The inappropriate use of the Prime Minister’s image to endorse products was recently highlighted in the media, but of more concern are activities which clearly breach both the New Zealand and WHO Codes,” she said, pointing to the publication and promotion of health claims and advertising in the media, and the implication that infant formula is superior to breastmilk.
Infant formula trade body also supports action
The Infant Nutrition Council (INC) said that it supports the decisive action taken to stop unlawful exports of infant formula from New Zealand to China and potentially other markets.
“The integrity of the New Zealand infant formula industry is a high priority for INC. We support the government’s action to protect the image of New Zealand as a reputable source of infant formula products globally,” Jan Carey, CEO at INC, said.
“We are proud that the quality and safety of infant formula produced in New Zealand is recognised by Chinese consumers, but it is important that in exporting our products all laws are met,” he added.
