Chinese authorities on June 13 released a work plan to encourage merging and corporate reorganization among domestic baby-formula producers to ensure the sound development of the industry.

The quality and safety of infant-formula milk powder is a key issue concerning people's quality of life, as well as a major economic and social issue, according to the document.

The plan says that companies will be encouraged to reorganize through mergers and acquisitions. By 2015, China aims to have formed around 10 baby-formula conglomerates, each with an annual sales revenue of more than 2 billion yuan ($321 million).

By that time, the top 10 domestic brands of baby formula are expected to account for a total market share of at least 65 percent.

The plan also sets a further goal of forming three to five baby-formula heavyweights with annual sales revenue exceeding 5 billion yuan ($803 million) each by 2018. The top 10 domestic industry players are then expected to nab more than 80 percent of the entire market.