(Yicai) Oct. 10 -- China's National Health Commission has approved two types of human milk oligosaccharides to be added to Chinese infant formulas.

Chinese milk powder giants China Feihe and Junlebao Dairy quickly responded to the NHC move and launched baby formulas with HMO on Oct. 8.

HMO is the third-largest nutrient in breast milk after lactose and fat. It has many functions, such as boosting the growth of probiotics, maintaining intestinal microecological balance, and regulating the immune system.

The move will significantly help the development of China's infant formula industry, further narrow the gap with the international market in terms of technological innovation, and encourage milk powder makers to provide consumers with more differentiated products, Yang Guochao, senior vice president of the Chinese arm of Dutch multinational dairy company FrieslandCampina, told Yicai yesterday.

HMOs have been used in many countries, Shao Wei, executive VP of the Chinese Institute of Food Science and Technology, said at an industry conference in July. Chinese consumers lack the scientific understanding of the nutrient, so the industry should promote the application and innovation development of HMOs in China, Shao added.

An industry insider told Yicai that although HMOs have just been approved, the Chinese milk powder firm they work for is already researching and developing HMO products. Major infant formula brands will likely launch upgraded products with HMO one after the other, they added.

As infant formulas with HMOs have to go through formula change or registration, it is estimated that related new products will take at least six to eight months to hit the market.

"The quick movement of major brands will intensify the competition in the industry," a staffer at a Chinese medium-sized infant formula maker told Yicai. The approval of HMOs is a turning point for the industry, so enterprises that do not follow suit immediately will be at a disadvantage, the person added, noting that companies still need to evaluate costs.

It is worth noting that due to the continuous decline in China's birth rate and the impact of price wars in the industry, the sales of infant formula in China slumped about 14 percent in the first half of the year from a year earlier, according to data from US market research firm Nielsen.

Editor: Futura Costaglione