Europeans fight for share in China

CHINA – Europe’s dairy giants are fighting to get a share of China’s milk market as it opens up to the West.

Nestle, Valio, Arla Foods and Danone are just some of the companies hoping to get a foothold in a market with over 1.3 billion consumers. Although current liquid milk consumption is on average a mere four litres per person per year, the Europeans believe there is massive scope for expansion.

Milk production is on the increase in China, according to the state statistics office in Beijing, topping 12 million tonnes this year, which is a 300% increase on 12 years ago.

Milk consumption is also on the increase, thanks largely to active promotion by the government, including state-sponsored TV advertising, and the European companies hope this will help drive consumption closer to the 304 litres per head a year that EU countries get through.

School milk is also subsidised, ice cream has become popular in cities and milk drinks and yogurts are fashionable snacks, according to a recent report from Radio China.

Aiding movement into Chin is the Beijing government’s decision to lower import duties on milk products from 30 to 10%, as well as the national five-year development plan that aims to increase per capita consumption of milk to ten litres by the end of 2005.