(Yicai) Nov. 9 -- Chinese dairy firm Junlebao will purchase a 30 percent stake in a yogurt drinks chain in order to ensure stable sales.

Junlebao will become a new shareholder of More Yogurt, the Shijiazhuang-based dairy firm announced yesterday. The pair will cooperate on the supply of raw materials for dairy products, development of new products, food security, and operation and management, Junlebao added.

More Yogurt is China’s largest freshly-made yogurt chain. It owns more than 1,600 stores nationwide, two-thirds of which are in first- and second-tier cities. Junlebao is China’s biggest low-temperature yogurt maker. It has 25 factories and 25 large modern pastures in the country.

The two companies are complementary, Song Liang, an independent analyst, told Yicai. With this move, Junlebao will become a yogurt supplier of More Yogurt, opening terminal retail channels directly to consumers, while More Yogurt will use Junlebao’s research and development system to upgrade its business, Song noted.

New Hope Dairy, another Chinese dairy company, invested in yogurt and tea brand A Yogurt Cow in 2021 to promote sales of raw materials for yogurt, hoping that the latter could become its direct channel to reach consumers.

However, industry insiders believe dairy firms acquiring downstream companies will not become a regular practice.

Editor: Futura Costaglione