However, the spokesman said the issues did not relate to food safety: “There have been no milk quality concerns identified in these investigations.”
The Chinese government has suspended the export certification for Camperdown, which is based in southwest Victoria and was taken over by Australian Dairy Farms Group several months ago for $11 million.
The certification remains suspended as the company seeks to resolve the issues.
Concerns were first raised by China’s Administration of Quality Supervision, Inspection and Quarantine, which says it is strengthening supervision of imported milk generally.
The agriculture spokesman said the department received last Thursday a letter from Chinese authorities acknowledging the suspension of Camperdown “and requesting information from other establishments producing pasteurised milk for the Chinese market” — a total of 41 companies.
The spokesman said this general request was “not related to noncompliance, but rather to clarify the processes in place to ensure the quality of Australian pasteurised milk products”.
Australian Dairy Farms has said no test result had revealed “any harmful bacteria”, and that liquid milk sales to China represented only 2 per cent of the total.
David Mahon, the Beijing-based chairman of Mahon China, a private equity management company that advises foreign companies on China’s food sector, told The Australian that while it might appear the milk concerns had been confected to reflect other issues with Australia, “the Chinese government is not a monolith”.
So the quarantine agency, for example, does not necessarily align its actions with the Commerce Ministry, “although it’s understandable that such events” as the latest noncompliance issue “give rise to conspiracy theories”.
Two underlying factors were at play, he said.
“One is that China is trying to hold its own food producers up to the highest standards,” seeking to reform what had become an unruly sector.
It has become a grave national issue for the government that the middle class especially, and consumers in general, lack confidence in the food standards of their own country.
The second factor is “the Chinese government has, since 1949, treated its grain producers — chiefly of rice, corn and wheat — as providing the cornerstone of the country’s food security”.
“But in the middle of this decade, this picture changed” as dairy products entered the picture, perceived as “having the qualities of a very special food, causing the sector to be viewed as a strategic industry”.
This is causing China’s large dairy companies to retain their herds at a relatively high level, despite global surplus production that had driven prices down.
“China’s own milk volumes will increase as a result,” Mr Mahon said — by an amount that will become clear only as herds start producing more milk with the onset of cooler weather in the northern autumn and winter.
He said that as China promoted the use of fresh milk — for which Australia is the leading exporter, since distance is a factor in transporting the product acceptably — “the government is going to be stringent in its requirements of Australian companies”.
“For there are a lot of volatile products out there,” many of them produced domestically. And Beijing wants to use imported milk standards as an exemplar.
There is rapid growth of fresh milk being produced in China, Mr Mahon said — “but most seems to be sold in the form of yoghurt and drinking yoghurt”.
He said there “might be a measure of protectionism involved in how imports are treated. But fresh milk is a very sensitive part of the overall dairy sector, with the domestic product still containing high levels of bacteria”.
Exporting infant formula to China, he said, “will remain a very good business for a long time”, because of the extreme sensitivity of parents and grandparents to quality concerns since the 2008 melamine scandal.
All fresh milk producers, domestic and imported, also faced challenges, he said, since China’s chilled chain remained largely undeveloped, limiting the radius in which it could be distributed.
Yoghurt products travel better. “Because they travel widely, and they are new to the dairy market, the Chinese have become the world’s most discerning consumers. They scan the internet for information about suppliers.
“It’s a very competitive market, whether you’re a foreign or domestic supplier.”
He said that when testing issues arose, as they now had with Australian companies, “it’s best just to take on the challenge and become compliant, because the people enforcing it just want to get this over with so the goods can flow as usual”.
Source: TheAustralian
Link: http://www.theaustralian.com.au/business/companies/china-halts-camperdown-exports-in-quality-audit/news-story/054e67765493a47a51236e804ee2f4dc