Modern Dairy Raw Milk Quality and Safety Management Policy

1. Purpose

This policy aims to clarify and effectively control key quality points at various stages of the raw milk production chain through comprehensive quality and compliance control throughout the entire farm process, thereby fully mitigating raw milk quality and compliance risks and ensuring the continuous output of high-quality raw milk.

2. Quality Management Certifications

Modern Dairy continuously carries out quality management policy certification work, covering multiple important certifications, including ISO 9001 Quality Management Policy Certification, “Organic Product Management Policy (GB/T 19630-2019)”, China GAP Good Agricultural Practices Certification, National Premium Milk Project Certification, and Farm Animal Welfare Product Certification.

In 2024, a total of 36 Modern Dairy farm legal entities passed the ISO 9001 Quality Management Policy Certification.

3. Quality Audits

3.1 Raw Milk Release Standards

• Outbound inspection and control are carried out based on the raw milk quality monitoring plan. Based on the inspection results, raw milk that meets the internal control standards of the raw milk enterprise is delivered normally.
• Raw milk that meets the requirements of China’s “GB19301-2010 National Food Safety Standard for Raw Milk” and “National Food Safety Standard for Raw Milk (GB 19301-2010) No. 1 Amendment” but does not meet the internal control standards of the raw milk enterprise can be dispatched and sold by the Sales Management Center.
• Raw milk that does not meet the “GB19301-2010 National Food Safety Standard for Raw Milk” shall be handled in accordance with <4. Handling of Abnormal Situations>.

3.2 Raw Milk Sampling

To ensure the accuracy of raw milk testing, we have established a standardized sampling management process:

• Sampling Personnel: Designated personnel from the Quality Control Department are responsible for sampling. Each shift in the milking parlor has trained, fixed sampling personnel.
• Sampling Standards: Sampling tools are strictly disinfected; milk is thoroughly stirred before sampling; microbial samples are collected first; physical and chemical samples need to be rinsed before sampling; samples are sent for testing or refrigerated promptly after collection.
• Sampling Requirements: Raw milk sampling must be conducted at the tank opening on the milk truck platform according to standards, and every tank opening must be sampled. Under special weather conditions, sampling can be done at the milk truck inlet after filing.
• Retained Sample Requirements: Raw milk retained samples are stored in two ways: refrigerated and frozen, to ensure sample traceability and meet testing and quality verification needs. Retained samples are clearly labeled, free from leakage and contamination during storage, and complete records are maintained.

3.3 Raw Milk Ex-factory Inspection Requirements

We have strict requirements for raw milk ex-factory inspection to ensure that every batch of raw milk meets quality standards:

• In principle, raw milk is tested during the working hours of the Quality Control Department and can only leave the premises after passing inspection.
• For special or temporary needs, the Quality Control Department will coordinate personnel for testing and release.
• Raw milk leaving the premises at night can be tested by designated quality control personnel from the farm or trained personnel from the milking parlor. The Quality Control Department is responsible for training, competency verification, and irregular spot checks of non-quality control testing personnel, and will hold accountable those who fail to perform.
• If raw milk released by non-quality control testing is rejected, the Quality Control Department and the milking parlor will jointly bear the corresponding responsibility.

4. Handling of Abnormal Situations

We have established a comprehensive mechanism for handling abnormal situations to prevent and address defective products and avoid product recalls:

4.1 Abnormal Handling during Raw Milk Production

If abnormal situations that may affect raw milk quality occur during raw milk production (such as equipment malfunction, operational issues, cleaning residues, herd health problems, changes in feed or environmental factors, etc.), relevant departments must promptly notify the farm’s Quality Control Department. The Quality Control Department will strengthen raw milk monitoring items based on the abnormal situation to ensure raw milk quality.

4.2 Abnormal Handling of Raw Milk Quality

The company has established a rigorous reporting, rectification, and handling mechanism for abnormal raw milk quality:

• Abnormal Self-inspection Indicators: When raw milk physical and chemical self-inspection indicators are abnormal or fall below the group’s quality targets, the farm’s Quality Control Department will report periodically. Relevant departments will adjust and improve the formula, and this batch of raw milk will be downgraded for sale.
• Does Not Meet Release Standards: If raw milk self-inspection does not meet the release standards, the farm’s Quality Control Department must report promptly. The farm general manager will organize an investigation into the cause, and unqualified raw milk will be downgraded for sale.
• Rejected Ex-factory Raw Milk: For rejected ex-factory raw milk, the farm’s milking parlor must report promptly.
  • Involving Food Safety Issues: The Quality Management Department will promptly report to senior management and dispose of the rejected raw milk by scrapping or internal feeding; if it involves state-controlled toxin items, it will be handled in accordance with national laws and regulations.
  • Involving Delivery Process Disputes: Led by the Planning and Dispatch Department, with coordination from the Quality Management Department.
  • Non-food Safety Rejection: The Planning and Dispatch Department is responsible for coordination and follow-up, and for transferring sales to other customers as per customer requirements.
• Major Food Safety Incidents: The farm general manager must report to the group’s senior management immediately. The Quality Management Department will organize various departments to investigate the cause, and initiate traceability and recall procedures if necessary. For special quality problems that cannot be improved in the short term, a project team can be formed to track rectification.

5. Training

Modern Dairy attaches great importance to improving employees’ quality awareness and professional skills, ensuring that all internal stakeholders fully understand their responsibilities and roles in the quality management policy through systematic training. Training content and forms include, but are not limited to:

• New Employee Onboarding Training: All new employees in key positions involving raw milk production, testing, quality management, etc., must receive comprehensive quality management policy training, including the company’s quality policy, quality objectives, various operating procedures, quality standards, abnormal handling processes, and their respective quality responsibilities.
• Job Skill Training: Regular professional skill training is conducted for different positions (such as sampling personnel, milking parlor personnel, quality control personnel, feeding personnel, etc.) to ensure employees are proficient in various operating procedures and testing methods.
• Quality Management Policy Special Training: Regular training on ISO 9001 quality management policy, organic product management policy, GAP, and other certification standards is organized to enable employees to understand and master policy requirements, promoting the effective operation and continuous improvement of the policy.
• Quality Awareness and Culture Building: Through internal communication, case analysis, experience sharing, and other forms, the quality awareness of all employees is continuously strengthened, fostering a “quality first” corporate culture, and encouraging employees to actively participate in quality improvement activities.
• Abnormal Handling and Emergency Response Training: Special training and drills are conducted for relevant personnel regarding abnormal situations in raw milk production, abnormal raw milk quality handling, and emergency response to major food safety incidents.
• Regular Assessment and Evaluation: After the training, the effectiveness of the training is assessed and evaluated to ensure that employees master the learned knowledge and skills and apply them in their actual work.

6. Customer Communication

We have established an efficient customer communication mechanism to respond to defective product complaints submitted by external stakeholders:

• When customers report unqualified raw milk indicators, the farm’s milking parlor must promptly inform the farm general manager and first communicate with the customer, while simultaneously reporting detailed information to the Quality Management Department and the Sales Management Center.
• After coordinating with the customer and confirming the raw milk rejection, the farm must immediately determine the milk disposal method and provide supporting evidence for subsequent handling as per customer requirements.
• During the customer communication process, we are committed to maintaining good customer relationships and avoiding unnecessary disputes.

7. Quality Improvement

7.1 Self-Correction and Self-Inspection

• During the production and operation process, the farm conducts self-correction and self-inspection in accordance with this policy and various module management policies, taking preventive measures to prevent quality problems from occurring.
• After rejection, warning, or other quality problems occur, the farm will quickly initiate an investigation, analyze the problem, find the root cause, and carry out autonomous quality improvement.

7.2 Rectification Verification

• The farm implements rectification measures for improvement and solidifies “effective” control measures.
• The Quality Control Department verifies the improvement effect. If the expected effect is not achieved or the improvement effect is not obvious, root cause analysis, improvement measures, and re-verification must be performed until the problem is completely improved.