Chinese customs authorities have cancelled the export licence of Lactalis, which allowed the French dairy giant to export infant formula to the Chinese market. The French company is now locked out of the lucrative Chinese infant formula market.

Chinese authorities also cancelled the export licences of eight other foreign milk powder companies, including Hochdorf Nutrition in Switzerland and Agrana Starke in Austria. Chinese officials re-approved the export licences for a total of 55 milk powder companies to do business in the market.

Introduced last year in a bid to regulate the number of infant formula brands on sale in China, foreign companies seeking to do business in China must be approved for a milk powder export licence from Chinese customs authorities.

For Lactalis, the world’s third-largest dairy company, being locked out of the Chinese market is undoubtedly a blow. Lactalis was forced to recall 43 batches of milk powder in China last year following a salmonella contamination in a number of its baby formula products.

In total, the company was forced to recall 12 million boxes of infant formula from retailers in 83 different countries around the world because of the salmonella outbreak at its Craon facility in France.

In 2018, Ireland exported €1.1bn worth of infant formula to world markets, with over half of this (€550m) destined for the Chinese market alone. More than 20% of all infant formula imported to China is manufactured in Ireland, whether it’s shipped direct from Ireland or packaged in other countries before shipping.