China orders cereulide tests as infant formula makers Nestle, Danone face recalls over toxin
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Nestle and Danone have implemented recalls of some batches of infant formula in different parts of the world.
PHOTO: AFP
BEIJING - China’s market regulator has ordered infant formula makers to test for cereulide, a toxin that has triggered precautionary recalls worldwide by some of the largest food companies.
Producers must strictly enforce controls on raw materials and product releases, the State Administration for Market Regulation said in a statement on Feb 12. Local governments were instructed to strengthen oversight of safety and quality standards, though no poisoning cases linked to infant formula have been reported in China.
The urgency stems from Nestle’s discovery of cereulide in baby formula traced to arachidonic acid (ARA) oil from a single company it did not name.
People familiar with the matter have since identified the supplier as China’s Cabio Biotech Wuhan, sending the company’s shares plunging 16 per cent in 2026.
Cabio has grown into one of the world’s biggest producers of ARA, supplying Nestle, Danone, and local formula makers such as China Feihe and Junlebao Dairy Group.
Its rise has fragmented the global infant formula supply chain, breaking Dutch chemical maker DSM-Firmenich’s former monopoly on the ingredient.
China’s stricter oversight may work to keep investor and consumer confidence intact, given the critical role of the Chinese supplier in the global infant formula industry.
The authorities earlier pressed Nestle to recall specific batches sold in China after detection of the toxin that can cause food‑borne illness, including vomiting.
Nestle expanded its recall also withdrew products
The regulator’s order marks China’s latest step to tighten oversight by setting clearer requirements for cereulide testing.
While manufacturers have said there are no confirmed illnesses linked to the recalls, regulators in several countries are investigating potential cases.
The recalls could weigh on Nestle and Danone’s reputations and accelerate stricter regulation across the global infant formula supply chain.
Markets, however, appear unfazed. Danone shares rose 4.72 per cent on Feb 12, while Nestle gained 1.39 per cent after China confirmed no poisoning cases and announced no additional recalls.
“We believe the market has already priced in the impact of Nestle’s global recalls, and we can hopefully now move on,” Barclays analyst Warren Ackerman said in a note. BLOOMBERG
