Aindrias Moynihan (Cork North West, Fianna Fail)
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56. To ask the Minister for Agriculture, Food and the Marine his engagement to date with Irish infant formula manufacturers regarding falling birth rates in China; if there is a strategy in place for these manufacturers for the substantial fall in market share; and if he will make a statement on the matter. [25225/23]

Aindrias Moynihan (Cork North West, Fianna Fail)
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Irish farmers produce food of the highest quality. They have a clean and green image. One of the outputs of that is the infant formula that is produced and traded across the world. Has the Minister engaged with various markets, Bord Bia and the industry about the pressure the industry is feeling as its output to China, for example, is diminishing?

Charlie McConalogue (Donegal, Fianna Fail)
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I thank Deputy Moynihan for raising this matter. As he knows, I have recently returned from leading a successful trade mission to China in co-operation with Bord Bia. The trade mission showcased, as we would expect, the very best of Irish food and drink to key existing and potential trade customers in China.

As a country, we have a hard-earned and well-deserved reputation as a supplier of safe and high quality infant formula to international markets, including China. It was our sixth most important agrifood export market last year, with total exports to China of €722 million, of which infant formula nutrition accounted for €266 million. The value of infant formula nutrition exports to China has reduced in recent years, largely due to the falling birth rate in China as well as the fact there has been growing import substitution by Chinese infant formula companies.

China’s demographics are changing significantly and Irish companies are responding to new market opportunities, for example by producing specialised nutrition products aimed at adults, including sports nutrition, and dairy nutrition products aimed at providing a healthy source of calcium and other nutrients for older persons. I was glad to launch two of those products from Irish companies last week when I was in China. I am also aware of the growing demand among Chinese trade customers for quality cheese products and other dairy ingredients from Ireland. There is real potential there, as I saw last week.

The research and development expertise available from Teagasc, together with the innovation supports provided by Enterprise Ireland and, importantly, the quality of our grass-fed and quality assured milk supply from Irish family farms are all significant in attracting and retaining multinational infant nutrition companies to locate and develop in here. My Department regularly engages with the infant formula sector on a range of regulatory and other issues. Over the period of Covid-19, my officials engaged remotely with their Chinese counterparts to ensure that interested Irish infant formula manufacturers were able to continue to comply with the detailed registration requirements for export to China during that time.

Aindrias Moynihan (Cork North West, Fianna Fail)
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China represents a significant part of the infant food market – I understand more than 26% globally. Its population is changing significantly. In 2016 there were 17 million or 18 million newborns; that figure is now closer to 10 million when it would have been expected to be almost double that. It is very much a moving target for enterprises selling into that market.

Of course, there is also growing confidence in its own product internally, which is being restored after an issue some years ago. The share of Irish producers in that market is coming under increasing pressure. Based on the clean and green image Ireland has, has Bord Bia been able to establish a more aggressive or stronger campaign to ensure that the Irish product can maintain its position and grow in that huge market?

Charlie McConalogue (Donegal, Fianna Fail)
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Bord Bia and the dairy companies working with it have been making significant efforts to build on the significant reputation we have as a quality, sustainable, safe and nutritious dairy exporter and increase various other strands of product into China. Infant formula is obviously a very important product that has to be produced to the highest of standards. Everyone takes very seriously what they feed their children. The fact we have such a strong presence in the infant formula market in China and other parts of the world is a reflection of the esteem in which our milk production system is held. We have been seeing significant change, as the Deputy pointed out, in the Chinese market in recent years with regard to infant formula. The Deputy pointed out the birth rate in China has dropped and the significant increase in domestic supply has been a significant factor. Infant formula milk exports to China peaked in 2017 at €618 million, whereas last year the same exports accounted for €266 million. That is a significant reduction. The Deputy has outlined the reasons for it. We are still a significant player, but we wish to develop the other opportunities in cheeses and nutrition drinks. There is a real market for the great nutritional qualities our milk products provide, on which Bord Bia and our strong dairy companies want to build.

Aindrias Moynihan (Cork North West, Fianna Fail)
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These exports are built on the efforts of our farmers producing a quality, traceable, high-standard product. It means we hold a significant portion of a valuable market. It is diminishing for the various different reasons. Bord Bia is a significant player in communicating a message to the customers on the quality product we have. Does it have a particular campaign to take on the pressure that the infant formula and dairy industry is feeling from that area? Is a campaign being lined up with Bord Bia to ensure the Irish product retains and builds on its reputation within that market, not just in cheeses and products for older people, but on the more valuable infant formula? Will a campaign be in put place by Bord Bia to build on what we already have there?

Charlie McConalogue (Donegal, Fianna Fail)
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Bord Bia works on that on an ongoing basis with the companies concerned. There has been a change in dynamic, that is, a significant increase in domestic supply and a preference in China for domestically produced infant formula in recent years. As the Deputy pointed out, a few years ago, the preference was for imported infant formula. That has been a change in dynamic. The level of market share of infant formula we had developed in China reflects the esteem in which our milk is held, and rightly so, given how we produce the milk through grass feeding and its health, nutrition and safety credentials, but other factors in the market have evolved in recent years. Bord Bia, with its companies, is working to make sure we maintain and maximise our share of the market there and look at developing new opportunities. It is fair to say we will probably not see the infant market grow in any significant way. The pressure is otherwise in China, but there is significant potential for growing other nutrition products, such as adult and elderly nutrition products and cheeses. There is very strong potential there for other strong products and it is important for us to work on all of those strands.