10/29/2013 06:10 pm ET Updated Dec 06, 2017

China Tightens Rules On Formula Makers To Promote Breastfeeding

(Reuters) - The Chinese government will tighten rules again on makers of infant formula to promote the use of breast feeding, state media said on Tuesday, banning pictures of children on packaging and formula companies from promoting their wares in hospitals.

Milk powder is a highly sensitive topic in China after a scandal in 2008, when melamine added to baby milk killed at least six children and made thousands ill.

The incident seriously damaged consumer confidence in local firms and led to international competitors gaining market share.

International guidelines, used in China, say doctors should promote breastfeeding unless there are medical reasons not to, but new mothers are often pressured to use formula, in the belief that it is better than breast milk.

The new rules state that infant feed should bear labels promoting the use of breast feeding and have no pictures of children, the official Xinhua news agency said, citing a notice from the food and drug watchdog, health ministry and State Administration of Industry and Commerce.

Hospitals and other medical facilities can receive no gifts or inducements from formula companies, which cannot push their products inside them, it said. Violators will face punishment.

Separately, the food watchdog will step up requirements ensure milk powder is safe, according to a draft law published by the government.

Formula manufacturers will have to report the raw materials, ingredients and labels of their products to food safety administrations, and will not allow them to contract production out, or repackage products under other labels, the draft states.

China also plans to tighten restrictions on the publication of news about food safety issues to prevent the spread of untrue information which could cause alarm, according to the draft.

Organizations and individuals "must not fabricate or spread phony food safety information", the draft said. "The news media must ... be objective, and fairly report on food safety issues."

Corruption is widespread in the health care system, fuelled in part by low salaries for doctors and nurses.

State television last month said Danone SA had bribed hospital staff to give its milk powder to newborn babies, allegations which the French group investigated immediately.

China is a magnet for foreign infant milk formula makers, with the $12.4 billion market expected to double by 2017.

But foreign firms have come under pressure amid a crackdown on pricing and as authorities look to consolidate the dairy sector and promote breast feeding.

In August, the National Development and Reform Commission fined a group of mostly foreign milk powder producers, including Danone, a total of $110 million for price-fixing.

Japan's Meiji Holdings Co Ltd, Nestle and Zhejiang Beingmate Scientific Technology Industry and Trade Co Ltd were also implicated, but escaped punishment for cooperating with the investigation.

Meiji said last week it would pull out of China's baby formula market, the first international firm to do so following the pricing crackdown.

(Reporting by Ben Blanchard and Adam Rose; Editing by Ron Popeski)

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