The dairy industry is one of Australia’s leading agricultural industries with approximately 9.2 billion litres of milk produced last year, nearly half of which was exported overseas, particularly to the Asia Pacific region (largely in the form of dried/powdered or UHT treated long life products). The opportunities for dairy products into Asia are immense and it is common for milk products to be sold in Asian supermarkets for the equivalent of A$10 per litre.

In adopting a preventative approach to food safety, the Australian dairy industry has designed strict science-based quality, management and risk processes. These processes are regulated by various Codes and Standards, Australian Federal and State agencies and Dairy Australia. The Australia New Zealand Food Standards Code, and particularly Standard 4.2.4 - The Primary Production and Processing Standards for Dairy Products, the Export Control Act 1982, the Export Control (Prescribed Goods – General) Order 2005 and Export Control (Milk and Milk Products) Orders 2005 are important regulations for the Australian dairy industry.

Australia’s National Science Agency, the CSIRO, has recently designed a technology that can significantly extend the shelf life of milk by rapidly identifying and eliminating contaminants. Proteases in milk can cause bitterness, gelation and sedimentation. The current industry test requires the identification of proteases in a few hours. The CSIRO’s newly developed biologically based sensors successfully identify proteases in milk in a matter of minutes.  Inspired by nature, biosensors replicate the senses of taste and smell of animals, and the CSIRO anticipates that the technology could also detect spoilage in other products. This development has the potential to swiftly detect risks to guarantee the maximum quality and microbiological safety of food production. It remains to be seen whether this technology will be adopted across Australia and other markets.

With Australian milk export to Asia on the rise, organisations are looking at ways to both expedite the export process whilst maintaining the safety, integrity and consistency of the product. Export efforts have been challenged by lengthy quality assurance and quarantine processes which take place both before shipment from Australia and on arrival at China.  Export of fresh milk to China previously was not viable given that the export time (14-21 days) exceeded the milk’s shelf life.   In a recent breakthrough, the practice of exporting fresh milk to China has now become quicker and simpler. Last year, Chinese officials approved strict quality assurance protections for dairy products.

In China, on 24 January 2013, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) promulgated the Supervision & Administrative Measures on the Inspection & Quarantine of Dairy Imports & Exports (Administrative Measures, AQSIQ Order No. 152 of 2013), which came into force on 1 May 2014. The newly introduced assurance protections under the Administrative Measures include:

  • Compulsory registration and audit process of all overseas producers. For example, for registration, all overseas dairy producers must be registered with AQSIQ. Overseas producers must also declare the type and brand of exported dairy product. Overseas dairy producers are also required to:
    • be familiar with China’s food safety standards and requirements;
    • confirm that their products comply with China’s food safety standards and requirements; and
    • submit testing reports on specific items as stipulated in China’s food safety standards; and
  • Record keeping of exporters and agents. Exporters of dairy products into China and their agents must also file with AQSIQ for record.
  • New health certification attestations. The certificates will have to be issued by the competent government agencies in charge in the jurisdiction where the producers are located. AQSIQ will provide samples for such certificates.

After the Administrative Measures were issued, AQSIQ further strengthened the regulation of the importation of infant formula products into China. In an order issued by AQSIQ on 27 September 2013 (Announcement 2013-133), AQSIQ required that bulk infant formula cannot be imported into China for repackaging and that Chinese labels must be printed on the smallest package of infant formula products before they are imported into China.

In Australia, the process for ensuring establishments are registered in accordance with these Administrative Measures involves Australia’s Department of Agriculture (DoA), which submits lists of export registered dairy establishments to AQSIQ.

China’s proactive regulations are very similar to Australia’s existing dairy assurance protocols, which has given Australian dairy organisations comfort that their exported dairy is safe for consumption. Last month, New South Wales dairy co-operative, Norco Co-operative Limited (Norco), in collaboration with Dairy Connect and the international export consultancy, PGS completed a successful trial shipment of 1000 litres of milk to China within nine days. The Norco shipment represents the first ever expedited transfer of fresh milk from Australia to an Asian market. This has involved the implementation of a novel, fast-tracked quarantine clearance agreement with relevant Chinese agencies including the development of rigorous quality assurance processes in a collaboration effort that took about 12 months.  These commercial developments demonstrate the opportunities available for the export of millions of litres of fresh milk to China each year for those organisations willing to enter into such collaborations.

Not only is there a strong demand for fresh dairy products, but the demand for dairy ingredients such as milk powders is also markedly increasing in Asia. Organisations are being reminded to ensure that these products do not carry any food-safety risks to consumers. In the last year, the milk powder products of a leading New Zealand exporter were found to contain clostridium botulinum, which may be associated with food spoilage at elevated levels. This triggered a mass global recall, including in China and Australia. It was in the aftermath of this incident that China tightened controls on imported milk formula by introducing the Administrative Measures as well as the Announcement 2013-133. As Australians exported nearly 4,000 tonnes of infant formula to China in 2013, various Australian companies have been completing the registration process required under the Administrative Measures through the DoA, which was due by 1 May 2014. These developments highlight that individual recall events can lead to ramifications felt across entire industries.