Chinese premier vows to boost dairy industry (2)

China will establish a baby milk powder standard system according to international standards, improve the quality monitoring of such products in the market in an open, transparent and standardized manner.

The cabinet's move follows plummeting consumer confidence after a series of domestic baby formula scandals.

The industry lost consumers' trust after the Sanlu Group was found to have adulterated its infant formula with melamine, a chemical compound used to create plastic, in 2008. Six children died from drinking the milk, while 300,000 were sickened.

The Sanlu Group subsequently went bankrupt. The profits of other Chinese dairy companies suffered greatly in 2008.

Since then, Chinese consumers have been purchasing increasing amounts of milk powder from foreign countries or via online purchasing agents.

A 2012 report by AC Nielsen said that four foreign brands, namely MeadJohnson, Dumex, Wyeth and Abbott, had taken over nearly half of the Chinese market, with sales totaling 38.52 billion yuan (6.25 billion U.S. dollars).

Chinese consumers' craving for overseas milk powder has caused several countries including Australia, New Zealand and Germany to introduce quota measures to cope with China's growing demand for the products.

Experts suggested Chinese dairy companies should develop their own pastures to ensure a clean and high-quality source for their milk.

The National Development and Reform Commission is expected to allocate 1 billion yuan (162 million U.S. dollars) this year for the development of new milk sources, according to the Dairy Association of China.