Milk powder trademarked abroad dupes consumers

Chinese consumers are being duped into paying a premium for domestically produced infant formula, because manufacturers are exploiting a legal loophole that allows them to have their product trademarked cheaply in a foreign country. 

The Global Times discovered that agents who specialize in overseas trademarks, which is a legal process, can arrange to register brands for just a few thousand yuan.

In countries such as Australia, New Zealand and Denmark, which produce infant formula trusted by Chinese consumers, registering a trademark costs only 7,000 yuan ($1,139) in the former two nations and 8,500 yuan in Denmark.

A staff member surnamed Ma from a trademark registration agent said that after registering a foreign trademark, even though the production process is conducted domestically, the product can be labeled as a foreign brand.

A salesperson surnamed Ren from another agent suggested an easier way, which is to find a reputable foreign brand of formula and register it as a trademark in China.

Ren said that to make the origin of the product labeled as coming from a foreign country, one can set up a company in that country and register a trademark.

Since the melamine scandal in 2008, in which the chemical was used to give an appearance of higher protein content, consumers have shifted to imported infant formula. Companies have been exploiting this trademark loophole since 2011.

Wang Dingmian, chairman of the Guangzhou Dairy Association, told the Global Times that registering a foreign trademark and commissioning the production to a manufacturer is not a problem if the manufacturer operates under the supervision of authorities, adding that it can be quite risky as the manufacturer may not take the responsibility of guaranteeing the quality.

"So far China doesn't have regulations on these behaviors and this kind of product takes up a large market share," Wang said. "In this case, we should focus more on the product's quality."