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Milk scandal benefits domestic and foreign brands

(Xinhua)
Updated: 2008-09-21 21:53

BEIJING -- As the scandal of China's tainted milk threatens the country's dairy industry, foreign brands and Chinese producers not involved in the scare have seen business opportunities.

"We've received many calls from distributors offering to sell our baby milk powder in the past few days and we are ready to increase output," said Ma Guowu, sales director of Beijing Sanyuan Foods Co., Ltd., a major producer whose baby formula and liquid milk passed national safety inspections last week.

He said sales of Sanyuan's liquid milk surged 200 percent on Friday after China's quality watchdog revealed on Thursday the company's products were safe.

Melamine, a chemical that has caused kidney stones in more than 6,000 babies across China, was detected in liquid milk produced by China's top three dairy companies: Bright Dairy, Yili and Mengniu.

Prior to that, the chemical was discovered in baby formula sold by 22 of 109 Chinese firms, including Sanlu, which had the highest content of melamine.

Domestic baby milk powder brands uninvolved in the contamination saw sales dip 33 percent in six days to Wednesday in the country's 350 biggest retailers, the Ministry of Commerce said Saturday.

The sales rebounded 20 percent on Thursday from the day before and a further 4 percent on Friday.

The Sanlu scandal dealt a heavy blow to the industry, but would give those brands considered safe a very good opportunity to stand out, said dairy analyst Chen Lianfang, of Beijing Orient Agribusiness Consultant, Ltd.

Meanwhile, the foreign dominance of the high-end baby formula market was expected to be strengthened, said Chen.

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