As the obsession for imported baby milk formulas rages on in China, some Chinese companies are taking advantage of the demand to make a quick buck by starting a branch abroad to sell what they call "imported milk" back to China.
Milk powder is a lucrative market now dominated by foreign brands. If you look at all these brands, there are some brands you've never heard of and are not sold locally in the country they are imported from. In fact, they are Chinese brands registered abroad.
After these Chinese companies register their own brands abroad, the companies ask local contracting manufacturers to produce the products, and then export the products to China.
"By doing this, they can transform into an international brand overnight," said Guo Fanli, senior research fellow from CI Consulting. "It's very lucrative there. They just grasp the mentality of consumers and sell products at extremely high prices."
While it's still legal to use a Western-style brand name and sell foreign made products to China, some so-called "foreign brands" have soured. Not only the brand, but also their products that are made in China.
In 2009, Scient, which claimed their powder was 100 percent made abroad was found to have been using instead all Chinese made powder. In 2011, Sunlife, which branded itself as a company that sold imported milk from New Zealand, apologized to the public, saying it was not proper to say its products were "all imported."
Officials say Chinese local governments have no responsibility to verify if the products are 100 percent imported -- a key issue for Chinese parents. As China's new regulations for imported milk are about to be enforced, many hope that Chinese parents won't be cheated again.
(CNTV.cn April 30, 2013)