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Chinese retailer introduces infant formula recall insurance

By Mark Astley+

25-Aug-2014
Last updated on 25-Aug-2014 at 16:38 GMT2014-08-25T16:38:04Z

Chinese retailer introduces infant formula recall insurance

Chinese retailer Suning Redbaby has reportedly begun offering an infant formula insurance policy that compensates customers in the event of a recall.

Under the policy, backed by Chinese insurance provider Ping An, consumers stand to receive up to 2,000 Yuan (US$325, €246) per tin if the infant formula product they buy becomes the subject of a recall, Reuters reported.

Payouts would be capped at 100,000 Yuan (US$16,250, €12,300), Reuters added.

Suning Redbaby will, according to the reports, offer insurance free with the first 40,000 tins of infant formula sold.

After that, customers will be able to buy the insurance online, where the policy is available with a choice of infant formula from countries including China, New Zealand, the Netherlands, Denmark, France, and Switzerland.

The Chinese infant formula sector is unfortunately no stranger to quality and safety related recalls.

Current Chinese consumer concerns about the safety of infant formula can be traced back to 2008 when six infants died and around 300,000 people fell ill after consumer melamine tainted milk powder.

A steady stream of domestic infant formula recalls in China, impacting companies such as Yili, has followed, and Western brands have not gone unscathed.

Most recently, in August 2013, Danone businesses Nutricia and Dumex pulled infant formula from shelves in countries including China as a precaution after a false food safety alert by Fonterra.

With sales of infant formula in China forecast to reach US$25bn (€33bn) by 2017, regaining the trust of Chinese consumers is vital.

“In recent years, the milk powder market in China has been in a mess,” Suning Commerce told Reuters.

“We realized that parent pay a great deal of attention to their children health and safety, and in particular, the safety of their infants’ foods,” Suning added.

Attempts by DairyReporter.com to contact Nanjing-based retail giant Suning Commerce, the parent company of Redbaby, were unsuccessful.