"Warm welcome"

Abbott Laboratories and Mead Johnson Nutrition Co of the United States, Danone SA of France and Switzerland's Nestle SA are among the major sellers of infant milk formula in China.

They buy base milk powder from Fonterra to process into infant milk formula for sale in China's $12.4 billion market, the world's biggest. Earlier this year, Fonterra began selling its own infant milk formula brand in China on a pilot basis.

Supplying more than 60 percent of global whole milk powder exports, New Zealand has long dominated China's import market, accounting for an average 80-90 percent of total powder imports each month since 2009. But in June, even before Fonterra's food safety scare, imports from other countries surged, especially from Europe and the United States. By September, they made up more than half of all shipments, Chinese customs data showed.

While heavy demand lifted New Zealand powder imports in October, imports from elsewhere are rising fast, jumping 53 percent in the year to October, almost twice the pace as those from New Zealand.

"Any non-New Zealand supplier turning up in China is getting a warm welcome," said John Shaskey, New Zealand-based executive director of dairy broker Global Dairy Network.

One large US infant formula firm plans to increase the proportion of supply it gets from Europe, especially Ireland, a person with direct knowledge of the plan said, adding he didn't want his or the firm's name to be used as the decision has not yet been finalized. He declined to name any specific suppliers.

Any new demand in the fast-growing market will likely be sourced from Europe, he said. The company currently gets around 60 percent of its milk powder used in China from New Zealand.

Mead Johnson, the largest infant formula seller in China by market share, according to Euromonitor, declined to comment. A spokesman for Abbott said he was unable to discuss supplier contracts.

Danone's Dumex milk powder unit has cut its supply from Fonterra for the Chinese market due mostly to lower production in China since the August health scare, said a person with knowledge of that situation.

Officials from Danone, which has said it is considering legal action against Fonterra over the impact of the food scare on its China sales, declined to comment. Nestle, which operates the Wyeth milk powder brand in China, did not respond to questions about its China business.

A spokeswoman for Hong Kong-listed Want Want, which uses Fonterra milk powder in some of its drinks, said it had a "diversified strategy" to manage supply chain risk. She declined to comment on individual suppliers.