China's Dairies Seek Government Support as Imports Double
Yicai Global
/SOURCE : Yicai
China's Dairies Seek Government Support as Imports Double

(Yicai Global) Oct. 11 -- Imported milk has taken over the Chinese market due to competitive pricing and the import quantity doubling in the past three years. Insiders have expressed concern about the impact on the domestic industry and seek measures from government authorities to protect their enterprises.

From January to August of this year, the amount of imported liquid milk to China was 420,000 tons, matching the import total for all of last year, according to the latest customs data. Imported fresh milk may exceed 700,000 tons, more than twice the amount of 2014, industry analysts estimate.

Domestic brands, such as Yili Industrial Group, China's second-largest dairy producer by revenue after Mengniu, are less competitive in price. Yili sells a liter of milk for RMB11 in supermarkets, whereas a liter of German or French whole milk is only RMB6.9 and can be bought for less than this online.

Due to lower prices and the preference of Chinese consumers for imported products, the trend of milk imports is likely to stay. In the long run, imported milk has a future as baby milk powder products are also very popular.

The current impact on and replacement of domestic by imported milk should be addressed, industrial dairy analyst Mr. Song Liang said.

"Domestic enterprises should dictate the terms for imported milk in the Chinese market. At the same time, relevant authorities should take measures to modify and increase the import criteria for milk.

This will ensure that imported milk would be high in quality and price, thereby creating differentiated competition with domestic product in the market. This can avoid negatively affecting the domestic dairy industry in the future," Mr. Song said.

Follow Yicai Global on