Meiji to launch new milk, yogurt in China on Dec 1

Japanese dairy producer Meiji Dairies Corp will launch new pasteurized milk and yogurt products in China after ceasing milk powder business in the country last month, the company said on Monday.

Meiji will start selling the new products on December 1 in four cities in East China - Shanghai, Suzhou, Hangzhou and Ningbo - before expanding to other cities, according to an e-mail sent to the Global Times by the company.

The milk come from cows in North China's -Hebei Province, and is then processed in Suzhou, East China's Jiangsu Province, a Meiji staff member who preferred to be anonymous told the Global Times Monday, noting the milk source is chosen according to Meiji's strict standards on raw material.

The company hopes to introduce its mature technology and experience into China where the milk and yogurt markets are undergoing rapid development, according to the e-mail.

Meiji is confident in its new products and foresees that they will help the company's revenues in the Chinese dairy market rise to 700 million yuan ($114.9 million) in 2020, Beijing-based newspaper International Finance News reported Monday.

China's market for liquid milk has been almost fully controlled by domestic dairy producers for many years because it is hard for foreign competitors to have stable local milk sources and reliable cold chain logistics, Song Liang, an industry analyst with the Distribution Productivity Promotion Center of China Commerce, told the Global Times Monday.

Pasteurized dairy products need to be kept in low temperature and Meiji has advanced technology in the field, Song said. Meiji may bring pressure on domestic competitors, he noted.

The development of domestic pastures makes it easier for foreign companies to produce liquid milk in China which will result in more competitors in the dairy sector, Song said, adding domestic players must take heed of the coming competition and make efforts to win back public trust after a series of scandals in the past few years.

However, some experts are skeptical about the potential for these new products. Considering that Chinese customers have little trust in domestic food and Meiji's new products use non-imported domestically- sourced milk, the future of Meiji's new products is uncertain, according to media reports.

Meiji announced on October 24 that the company would temporarily stop selling milk powder in China after the current inventory has sold out because intense competition in the Chinese market has resulted in increased costs for Meiji from importing milk from Australia.