China's dairy industry is facing reshuffle, and foreign milk powder erode the market

In the domestic milk powder repeatedly suffered negative news, the foreign milk powder is in the Chinese market to attack cities.

Recently, Ma Ying, deputy director of the Dairy Management Office of the Ministry of Agriculture, disclosed at the seminar on the quality and safety of infant milk powder and the whole industry chain model that foreign milk powder has seized 50% of the market share, and the industrial chain of domestic milk powder is becoming increasingly large. The impact.

Correspondingly, a major cleanup of China's dairy industry led by the government is in progress. According to the government's "Notice on Launching Project (Corporate) Audit Clearance in the Dairy Industry" requirement, dairy product manufacturers including infant milk powder must apply for a new production license.

In the new round of integration, can China's dairy industry reshuffle?

Broadcasting to Tencent Weibo’s foreign milk powder market consuming foreign milk powder has occupied half of China’s milk powder market, not an alarmist.

Recently, Mead Johnson infant formula milk powder will rise 8%, for a time the price of milk powder rises again. Since last year, foreign milk powder has repeatedly raised prices. The hidden truth behind this is that the foreign milk powder has gradually controlled the pricing power of China's milk powder industry.

“Now the foreign milk powder is indeed fierce, in Beijing, Shanghai and other first-tier cities, foreign brands of infant milk powder has occupied 80% to 90% of the market share, domestic milk powder in the high-end market share was severely squeezed.” Shanghai Ming Taiming Guan Bing, general manager of Dairy Consulting Co., told reporters.

According to Ma Ying, deputy director of the Dairy Industry Management Office of the Ministry of Agriculture, before the melamine incident in 2008, the market share of domestic milk powder reached 60%, but after that, a large part of consumers switched to foreign milk powder. At present, foreign milk powder has occupied China's milk powder market. Half of the country.

The reason for this, Lao Bing introduced, on the one hand, that Wyeth, Abbott and other foreign brands adjusted their product lines and launched mid- to low-end products suitable for second-tier cities; second, foreign brands' channels have gradually been reduced to prefecture-level cities' stores and hospitals. And successively established direct suppliers in the local area. Previously, the second-tier cities in China and the following markets were originally "home bases" for domestic milk powder.

A domestic-funded milk powder distributor in Linyi City, Shandong Province, confirmed to reporters that in the past two years, Wyeth has entered the hospital channel in Linyi City. However, in addition to Shengyuan, domestic brands of milk powder, Beinmei, Yashili, Feihe and other major brands have not entered the local area. Hospital channels.

In addition, domestically produced large-packaged milk powder, which was originally widely used in the production of yogurt, reconstituted milk, and milk beverages, as well as bakery, confectionery, and confectionery, was also hit by the impact of imported large-packaged milk powder. Ma Ying revealed that in the first 11 months of 2010, the total amount of imported large-package milk powder hit a record high of 370,600 tons.

Wang Dingmian, deputy director of the Guangzhou Milk Project Office, told reporters that before 2008, China's imported large-packaged milk powder did not exceed 150,000 tons. After the melamine incident, a large number of dairy and food companies refused to use domestically produced large-package milk powder. Provides access to imported large packaged milk powder.

"In 2010, nearly 400,000 tons of imported large-package milk powder was equivalent to 3.5 million tons of fresh milk, which accounted for about 10% of China's fresh milk production, and in 2011 it is expected that imports will exceed 500,000 tons, and this growth momentum will continue. Absolutely not a good thing, the domestic milk powder industry chain will be impacted." Wang Ding cotton said so.

The signs of the shock of price inversion have begun to appear.

He Mingfeng, general manager of Zhuhai Aocheng Trading Co., Ltd., who is importing large-package milk powder business, told reporters that on January 18 New Zealand milk powder’s latest auction, full-fat milk powder prices increased by 1.5%, skim milk powder prices increased by 5.6%, and recent auctions The prices are rising all the way.

This means that domestic companies using imported large-package milk powder will face the pressure of rising costs. The underlying threat is that the influx of foreign milk powder has threatened China's milk powder industry chain.

Wang Weimin, Secretary-General of Xi'an Dairy Association of Shaanxi Province, told the reporter that as the third largest milk powder producing province in the country, 60% to 70% of dairy products enterprises in Shaanxi Province produce large-scale milk powder, and in 2009, the production of milk powder in Shaanxi Province was 300,000 to 400,000 tons. , But in 2010 the price of fresh milk purchases, coupled with the advantages of imported large-package milk powder relative to domestic similar products cost-effective, leading to a number of local companies in the state of production or semi-discontinued state, the production in 2010 was 10% to 20% less than in 2009 .

It is understood that the current purchase price of fresh milk in Shaanxi Province has risen from the low 2.5 yuan/kg to the current 3.5 to 3.6 yuan per kilogram, and the highest purchase price has been called to 4.15 yuan/kg. This means that the cost of one ton of domestically-made large-package milk powder is around 35,000 yuan, and the current market price is between 32,000 and 33,000 yuan. The "price upside down" has caused many milk powder processing plants to fail to operate.

China Dairy Industry "Cleaning Portal"

A series of malignant chain reactions began to appear.

The industry believes that the lack of start-up of domestic milk powder processing plants has led to a reduction in the acquisition of fresh milk in China, which has resulted in the loss of the interests of dairy farmers.

The position of Ma Ying in the Ministry of Agriculture has also issued similar concerns. China's cattle and sheep breeding industry will be squeezed. Each additional 100,000 tons of imported milk powder will directly lead to the reduction of demand for 850,000 tons of raw milk.

At present, the Chinese government is conducting a large-scale mapping and clean-up of the dairy industry through the improvement of access thresholds. According to the government's "Notice on Launching Project (Corporate) Auditing and Clearing Work in the Dairy Industry", dairy companies including infant milk powder must re-apply for production licenses. Otherwise, companies that did not receive permits in March 2011 will be required. Will be ordered to withdraw from the market.

According to industry sources, in order to re-apply for production licenses, dairy companies must be equipped with appropriate testing equipment, self-inspection of 64 indicators such as food additives and melamine. And these equipment investment is as low as 2 million to 3 million yuan, and as many as 10 million yuan.

"This is bound to set off a new round of industry consolidation. It is estimated that 20% to 30% of SMEs will be eliminated. This also indicates that the government is determined to rectify the dairy industry, to improve the industry's access threshold, clean up the non-standard enterprises. Go out.” Analysis of the industry.

At the same time, China's "Administrative Measures on Inspection and Quarantine of Imports and Export Dairy Products" is soliciting opinions, and it will be ordered to recall infant formulae in the future. Industry insiders believe that foreign brands' treatment is expected to end.

“However, the Chinese dairy industry must fundamentally change the situation where foreign milk powder accounts for half of the country. Only the competitiveness of the entire dairy industry can be improved, especially the management of milk sources,” said Chen Min, a member of the China Dairy Industry Association.

In recent years, the prices of foreign milk powder rose. In January and February of 2010, the foreign brand milk powder promoted the first round of price increase, with an average price increase of approximately 10%;

Beginning in April 2010, Abbott, Schein and others participated in the second round of price increases, which ranged from 5% to 10%;

In July and August 2010, Wyeth's second, third and fourth segment ex-factory prices were raised by 7%;

In January 2011, Nestlé officially raised the price of some adult milk powder by 5% to 10%, while Ausnutria and Bein America adjusted their fate by about 10%;

The news that Mead Johnson's infant milk powder will increase in price recently has risen by about 8%.