Baby formula industry to consolidate

In addition to the requirement that every batch of raw milk be tested for melamine after the scandal, the government also demanded quality supervisors stationed at factories to oversee the whole process from raw materials to end product.

The baby formula businesses also made huge investments to ensure and improve product quality, according to insiders.

Chenguan, one of the four dairy businesses that specialize in baby formula production in Shanghai, said in addition to the 64 items that are required to be tested, it tests more than 20 other items, such as the level of lutein.

"The national standard says the tested amount of melamine in baby formula should not exceed 1 mg per kg, while our ceiling is 0.01 mg per kg," said Sun Jing, brand manager of Shanghai Chenguan Dairy Co Ltd.

Each of the businesses have established credit and traceability systems, said Gu Zhenhua, deputy director of Shanghai Municipal Food Safety Commission Office.

"According to official test reports, dairy products in Shanghai, especially baby formula, are 100 percent reliable, but consumers don't think this way. One of the popular goods residents buy from overseas is baby formula," he said.

Due to excessive consumption, on March 1 Hong Kong put a regulation in place, limiting the amount of baby formula people from the Chinese mainland can carry when they depart to two cans.

One way to narrow the gap between the government's guarantee and the reaction from society is to further improve information disclosure, Gu said.

"If consumers buy a product and they can check its test reports online, they'll feel more reassured," he said. "We're urging businesses to display the test results of every batch of product on their websites."