Government Considers U-turn On Baby Formula Rules After Industry Shift

Monday, 7 April 2025, 6:06 pm
Article: RNZ

Anusha Bradley, Investigative Reporter

The government is considering signing up to Trans-Tasman rules on baby formula - after rejecting them amid industry lobbying.

This potential policy shift follows a change of heart from formula companies, including major players Danone and The a2 Milk Company, who had previously campaigned against the standards.

These companies now support opting in to the regulations and have dropped all opposition to restricting specialist formulas to pharmacies - one of the major sticking points during the standards' drafting.

The proposed standards, developed by Food Standards Australia New Zealand over more than a decade, aim to update 20-year-old regulations and tighten rules on misleading product claims.

New Zealand initially opted out, citing concerns over potential harm to its $2 billion annual infant formula exports.

An RNZ investigation revealed extensive lobbying by a handful of formula companies, who argued the changes would negatively impact their exports and profits, and would threaten their continued presence in New Zealand.

The companies, led by Danone and a2, bombarded senior ministers with emails, letters, surveys and even legal advice, as well as having at least six meetings with Food Safety Minister Andrew Hoggard in the six months leading up to the decision late last year.

Alongside the proposal to restrict "medical" formula sales to pharmacies, the companies also disagreed with changes that would have prevented them from being able to list ingredients or milk protein fractions on the front labels of formula tins.

Following New Zealand's decision to opt out of the joint standards, the government announced it would look at creating its own standards.

But the Ministry for Primary Industries is now looking at how it can join back in and negotiate an exemption with Australia on the labelling restrictions that formula companies opposed, RNZ understands.

In an interview, Hoggard declined to confirm what options were on the table, or if he backed a move to join the standards with Australia.

"I need to be discussing this not only with Australia, but also potentially with Cabinet. Those are discussions I want to have face to face with people, not via the media.

"For me, where I want to get to is a place where we are utilising the best of that standard, whether or not we copy and paste it or we're able to modify it and get back in.

"My preference is to just provide certainty to the industry as to where we are going forward from here."

Infant Nutrition Council chief executive Jonathan Chew said its 36 members, which included Danone and a2, wanted the government to opt back in.

"Members all agree that it is the best outcome if the New Zealand government was prepared to follow through with that option, acknowledging that it requires negotiation with the Australian government.

"Then if option one fails, that leaves plan b," Chew said, referring to the government's original plan of creating a New Zealand standard under the Food Act.

Opting in with an exemption for the labelling issues was always the industry's preference, Chew said, but this could not be achieved last year.

"A quirk in the FSANZ process prevented that from happening. New Zealand, to get a modification, has to raise the issue before the final proposal is presented. But you're not necessarily going to know if you need a modification until the final proposal comes out."

Hoggard said he did not get advice on this process until it was too late.

Chew said there were now concerns Australia could try and prevent imports of New Zealand formula that did not comply with the new standards once they came into force in 2030.

For more than 15 years, the Trans-Tasman Mutual Recognition Agreement has allowed goods imported into either country to be legally sold without meeting the other country's requirements.

Only a small number of high-risk products, such as firearms and hazardous substances are exempt.

But in January, the Australian government re-categorised imported infant formula products as "medium to high risk".

It was the first time formula imports had been given this rating but it was enough to make Danone concerned.

Danone declined to be interviewed, but in a statement, it said such a move might restrict free trade between New Zealand and Australia.

"This early action may restrict free trade between New Zealand and Australia," Danone director Maria Venetoulis said.

She questioned whether trade restrictions would be realistic given products labelled for New Zealand or export markets would be compositionally identical to products labelled for Australia.

"The food safety risk for both products should be the same."

In the meantime, the "best option" is for New Zealand to opt in to the standards with a modification for the labelling issues.

It had called for the government to opt out of the scheme last year, because at that time a modification could not be guaranteed, Venetoulis said.

Opposition to specialist formulas dropped

Meanwhile, formula companies no longer opposed restricting the sale of medical purpose formulas to pharmacies only, Chew said.

"This is not a live issue anymore. The industry has decided the issues around labelling are more important and that's been the focus."

Under the proposal, special medical purpose formulas, such as those for colic, reflux or lactose-free, would be taken off supermarket shelves and could only be bought from pharmacies or from health professionals.

Danone and the INC argued this would severely restrict access to these products for rural families and could lead to some special formulas - which were mostly imported - from being discontinued.

Australian academic Julie Smith, who researches the lobbying activities of infant formula companies, said Danone and a2 Milk dominated the specialised medical formulas market in New Zealand, but had probably realised they would be able to sell their products through online pharmacies instead.

She also questioned the likelihood of New Zealand getting a modification to the labelling standards if it were to opt back in.

"If it's evidence-based, then zero chance, because it's been well established that this promotion of products is effective in marketing formulas and affecting parents' decisions.

"But if it comes down to industry power over officials and ministers, then I'd say the chances are very good," the Australian National University professor said.

"It's a problem for our democracy when our health policies and what's going into our babies mouths is not determined by evidence about what's good for them, it's determined by marketing.

"People will be shocked if they realise just how much of what we eat is determined by that sort of lobbying."

Labour's food safety spokesperson Rachel Brooking said it was "worth trying" to opt back into the standards with Australia.

"An opt out can cause confusions with the different labels between countries. But if a standalone standard is needed for New Zealand, then it does need to be based on infant safety rather than the economics of what companies are maybe saying."

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