(Yicai) Aug. 24 -- Pinlive Foods, the Chinese owner of top-selling imported dairy brand Weidendorf, turned gains into losses in the first half as sales of dairy products declined.

From January to June, net loss tallied CNY58.5 million (USD8 million) compared with a net profit of CNY15.5 million in the same period of last year, the Shanghai-based seller of grains, beer, and olive oil wrote in its earnings report yesterday. Revenue slipped by 22 percent to around CNY575 million (USD80 million).

Pinlive owns several food and beverage brands such as Gullon for crackers and Wurenbacher for beer but Weidendorf may be the most renowned as it was the No. 1 best-selling imported milk brand for four straight years till 2022, according to Kantar Worldpanel.

One of the big factors behind the slowdown this year is the weak milk business. Sales of imported milk brought CNY460 million to the company, down by 21 percent. The gross margin of the business dropped to 9 percent from 25.3 percent. With declining sale, the number of dealers reduced to 355 from 630.

Costs have been rising. Although raw milk is not expensive in European Union, the Russia-Ukraine conflict, the energy crisis, and other factors have caused production costs to surge, Zhang Yuan, a businessman from Ningbo engaged in import trade for years, told Yicai. Moreover, the weak foreign exchange rate of the yuan has also raised importing costs.

Meanwhile, domestic brands are gearing up with bigger sales promotions to reduce inventory amid soft consumption. As Chinese brands are making greater efforts to sell more, the cost advantage of foreign brands is getting smaller, Song Liang, an independent dairy analyst, said to Yicai.

Imported milk will remain an important supplement to domestic production in the medium and long run, and the cost gap will always exist but the low prices of Chinese milk makes it especially hard for foreign brands right now, Song explained.

Editors: Tang Shihua, Emmi Laine