In a statement issued late last week, the China Food and Drug Administration (SFDA) said that just 82 of the 133 infant formula manufacturers that applied have been granted permits.
The remaining 51 manufacturers "failed or applied to postpone the investigation and some of them withdrew from the industry," reported China Central Television (CCTV).
These firms will be forced to cease production this month, it added.
In line with new Chinese government regulations designed to "further strengthen the quality and safety" of infant formula products made in the country, the SFDA developed "a series of measures."
The revised regulation, Infant Formula Milk Powder Production License Examination Rules (2013 edition), was issued in December 2013. It increased requirements in areas including the purchase of raw materials, product inspection, product traceability, and product safety control.
The 82 companies handed renewed permits spent nearly 2.5bn yuan (US$400m, €295m) to ensure their lines met these new requirement, CCTV also reported.
Alongside its assault on domestic infant formula manufacturers, China has also clamped down on the influx of foreign infant formula firms in an effort to help domestic manufacturers reclaims a larger share of the market.
In line with the State General Administration of the People’s Republic of China for Quality Supervision and Inspection and Quarantine (AQSIQ)-issued Decree 145, foreign authorities are now required to provide the Certification and Accreditation Administration of China (CNCA) with a list of approved dairy manufacturers.
In late April 2014, just days before the new Chinese rules came into force, scores of New Zealand infant formula manufacturers and brand owners were warned that their products could be temporarily denied entry into China.