Story from AFR 25 Feb, page-9

Lets look at this rationally.

In October last year, the Chinese government published draft regulation titled "Supervision and Management on Cross-Border E-Commerce of Imported Food through Bonded Online Shopping".

The only specific requirement regarding the importation of infant formula is that each tin must have a Chinese label printed on them. A2 could simply place a label under the plastic lid of each tin. Then the resellers could simply stick the durable label on the tin before exporting to China. Or similar such system.

The draft regulations propose requirements for online trading platforms such as JD, TMall etc. The new requirements are not onerous and are a move in the right direction to strengthen the industry into the future in my opinion.

The list of requirements can be viewed here:
http://compliancecloud.selerant.com...erce-in-china-new-draft-rules-published!.aspx

This article explains how international infant formula manufacturers are posed to increase their market share of the Chinese market as new food safety laws restrict the amount of domestic duplicate brands for sale on shelves.
http://www.smh.com.au/business/chin...rmula-brand-restrictions-20160127-gmeuao.html

It is most important to remember that the Chinese government has a stated economic policy to increase the birth rate over the coming decade(s) to balance the ageing population. To achieve this economic policy, one of the primary factors of its success will be to secure a growing flow of safe, regulated international infant formula. Large, proven, safe and licenced international exporters such as A2, Bellamys and Karicare, have an excellent reputation with the Chinese consumer which is evidenced by their increased demand. The Chinese government needs these manufactures to ensure Chinese couples know there is a safe, regulated supply of infant formula on the shelves at their local shops. The government will know that abruptly disrupting this flow will increase the anxiety of couples considering having more kids and thus have a detrimental effect on their economic policy.

Having said this, I am of the opinion that the Chinese government will continue to consult with industry and grandfather in prudent and considered regulations to secure the increased flow of licenced international baby formula.

Knee jerk reactions from fund managers such as Wilsons are not considering the bigger picture imho. Be mindful that other agendas may also be a play.