One trashed brand be­comes another com­pany’s trea­sure

China Daily (Hong Kong) - - IP SPECIAL - By HAO NAN hao­nan@chi­

Once syn­ony­mous with con­tam­i­nated milk, the Sanlu brand is get­ting a sec­ond chance — this time re­born as a trade­mark for or­ganic grain prod­ucts.

Sanlu was a house­hold name in the na­tion’s dairy in­dus­try and an iconic brand of Hebeibased Sanlu Group Co, one of China’s lead­ing sell­ers of milk pow­der for 15 years.

Then the com­pany was im­pli­cated as one of the ma­jor cul­prits melamine adul­ter­ation scan­dal that broke out in Septem­ber 2008.

That year milk pow­der con­tam­i­nated with melamine to in­crease pro­tein con­tent left at least six Chi­nese in­fants dead and al­most 300,000 with kid­ney ill­nesses.

When the com­pany an­nounced bank­ruptcy about six months later, its as­sets were auc­tioned, in­clud­ing the com­pany’s four plants as well as the Sanlu brand and re­lated trade­marks.

An en­tre­pre­neur from Zhejiang prov­ince bought th­ese pro­tected trade­marks for nearly 8 mil­lion yuan ($1.32 mil­lion) and then es­tab­lished Zhejiang Sanlu In­dus­trial Co Ltd.

Af­ter more than four years of re­search and de­vel­op­ment, the com­pany now pro­duces or­ganic coarse flour, noo­dles and grains.

Yang Xiang­dong, the com­pany’s mar­ket­ing man­ager, told China Na­tional Ra­dio that the main aim of pur­chas­ing the Sanlu trade­mark is to pro­tect a na­tional brand.

“The scan­dal is in the past,” he said. “Sanlu, which ex­isted as a na­tional brand for over a decade, should not van­ish, and we hope that our com­pany can en­dow the brand with an en­tire new in­ter­pre­ta­tion by pro­vid­ing pol­lu­tion-free and high­qual­ity coarse food grains.”

He also said that the com­pany would learn a les­son from the toxic milk pow­der scan­dal by strictly con­trol­ling sources to en­sure safety through­out the pro­duc­tion chain, ac­cord­ing to a re­port from Bei­jing Busi­ness To­day.

Given the in­creas­ing num­ber of reg­is­tered trade­marks in China, only a few brands can be eas­ily rec­og­nized by cus­tomers, said Jian Ai­hua, a food re­searcher from pro­fes­sional Chi­nese in­dus­try re­search and in­vest­ment con­sult­ing com­pany CIConsulting.

The value of the Sanlu brand may re­cover as the scan­dal grad­u­ally fades from the pub­lic mem­ory, Jian said.

Zhang Shut­ing, head of the Busi­ness Brand In­sti­tute af­fil­i­ated with China Com­mu­ni­ca­tion Univer­sity, is not as op­ti­mistic as Yang and Jian.

“The Sanlu brand car­ries many neg­a­tive con­no­ta­tions that can­not be shed in the short term. Any com­pany sell­ing new prod­ucts with this trade­mark is tak­ing a huge risk,” he ex­plained.

Many Sina Weibo users also say they will not buy the new coarse grain prod­ucts be­cause they im­me­di­ately as­so­ci­ate the brand with the scan­dal.

But oth­ers sug­gested giv­ing the com­pany a chance be­cause the fact that it is bold enough to use a trade­mark with such neg­a­tive as­so­ci­a­tions shows it has con­fi­dence in its prod­ucts.

Ex­perts say recog­ni­tion and suc­cess will de­pend on how hard the com­pany works to build its rep­u­ta­tion and of­fer cus­tomers good value.


Sanlu as a trade­mark for or­ganic food is show­cased at a re­cent agri­cul­tural expo in Zhejiang prov­ince.

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