(Yicai Global) Feb. 22 -- China's infant formula market is predicted to get less crowded as industry leaders gain from the new quality standards while not all meet the higher bar.

Some 112 brands of 31 milk powder makers have been approved by the National Medical Products Administration as of Feb. 15, Yicai Global learned. The group includes industry leaders China Feihe, Inner Mongolia Yili Industrial Group, Junlebao Dairy Group, Mead Johnson, Wyeth, FrieslandCampina, and Danone. The upgraded rules came into effect today.

Around one-third of baby formula brands will withdraw from the market because of the new standards, according to industry insiders. The potentially disqualified companies account for 10 percent to 15 percent of the total market, equalling up to CNY24 billion (USD3.5 billion) in sales, based on a research report by Haitong International Securities Group.

The updated rules make a distinction between step two (7-12 months) and step three (13-36 months) infant formulas. Some of the major changes are lowering the upper limit of protein while requiring certain levels of selenium, manganese, and choline, and banning the sugars of sucrose and fructose.

The revised standards lower protein content by around 30 percent to prevent the risk of obesity, Beijing-based China Feihe said to Yicai Global. They pose higher technological requirements, which makes research and development prowess a core competence for firms, the dairy company added.

The sector is entering a new race, Xu Sa, chief scientist and innovation officer at Mead Johnson China, said, adding that the innovation challenge will test companies’ scientific and technological strength and products.

Editors: Zhang Yushuo, Emmi Laine, Xiao Yi