The infant formula market features extensively throughout the July edition of Dairy Product China News (DPCN) – subscribe for an expert insight into China’s dairy industry
Domestic brands on the rise in China
The latest headlines are highlighting the troubles faced by operators – this is despite the fact that domestic brands achieved a slightly bigger increase than imported brands in 2014. New products continue to be launched; during the last year, the total market share of the Top 10 brands was 71%, down by 5% over the last two years, reflecting the incursion of 200+ new brands.
The government’s desire to make the formula industry’s integration progress at a faster pace than has so far been possible is also evident. Its dilemma here runs to the heart of the conundrum facing the entire economy and playing itself out in the stock market falls – how can central government control and capitalist growth ultimately be reconciled?
New regulations shape China’s dairy market
The trade situation is still very difficult: milk continues to flow in many world regions while demand in China in particular is depressed, so the increased volumes on offer at the Global Dairy Trade (GDT) event next week surely mean another drop.
Policy changes in China seem likely to exacerbate the situation further. It has been clear for some time that stocks of locally-produced milk powders have been rising, the result of the state forcing processors to buy local milk. One of the biggest buyers of whole milk powder (WMP) is the yoghurt industry, which prefers imported to domestic powders for price and quality reasons.
It seems that the government will prohibit the use of powders in yoghurt to facilitate the use of domestic milk. As ever, state actions play a key role in shaping this market.
This subject is explored further in this month’s DPCN – see the table of contents below to see what other topics are covered.
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