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Supply Chain

China's Baby-Formula Revamp May Trigger Boom For Nestlé, Danone

A safety overhaul of China’s notorious baby-formula industry removed about 1,400 products from store shelves this week, clearing the way for international brands such as Nestlé and Danone to grab greater shares of a $20 billion market.

The regulations, effective January 1, require factories making formula to register those products with China’s Food and Drug Administration and pass safety inspections. Plants are limited to working with three brands, and those brands can make only three different products each.

Products not certified by the government were banned from sale. Those typically came from smaller, sometimes dubious local brands that used generic powder and put their own labels on it.

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