Thurs­day Yili ups the ante in milk war with Meng­niu

China Daily (USA) - - NEWS CAPSULE -

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In­ner Mon­go­lia Yili In­dus­trial Group Co’s com­pe­ti­tion with China Meng­niu Dairy Co in the $52 bil­lion Chi­nese dairy mar­ket is go­ing up­scale, cen­ter­ing on a pre­mium, or­ganic seg­ment that makes up just one per­cent of the coun­try’s milk con­sump­tion.

Yili is pay­ing 4.6 bil­lion yuan ($680 mil­lion) for 37 per­cent of China Shengmu Or­ganic Milk Ltd. The Ho­hhot, China-based com­pany could lift its stake fur­ther, giv­ing Yili ma­jor­ity con­trol of the largest Chi­nese or­ganic milk pro­ducer and the only one in the coun­try cur­rently cer­ti­fied to meet Euro­pean stan­dards.

China’s milk com­pa­nies have been strug­gling to win back the trust of cus­tomers af­ter a se­ries of food safety scan­dals, in­clud­ing a 2008 case in­volv­ing melamine­tainted milk that was blamed for the death of in­fants. That’s led Yili and Meng­niu, the coun­try’s top two dairy pro­duc­ers with about 40 per­cent of the mar­ket, to in­tro­duce new prod­ucts and en­ter col­lab­o­ra­tions with over­seas sup­pli­ers and brands.( Photo 5)

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