The dairy Industry in China is attempting to rebrand itself due to a downfall in consumer confidence, as well as competition from foreign brands. The Chinese consumers, in recent times, have been purchasing increasing amounts of milk powder from foreign countries.
The recent development came as consumers have lost confidence in domestic brands due to the food scandal in the year 2008. Media reports have said that many of countries like Australia, New Zealand and Germany have introduced quota measures to cope with the growing demand for milk powder.
The consumers have lost confidence after the Sanlu Group was found to have adulterated its instant formula with melamine. Melamine is a chemical compound which is used to create plastic. The incident occurred in the year 2008, due to which six children died from drinking contaminated milk, while 300,000 others fell sick.
Wang Dingmian, a dairy industry expert said that the industry has to increase consumer confidence before it can be revived. Wang went on to say that foreign brands are expanding, from high end markets in the large cities to the smaller markets. Since the incident, the Sanlu Group has gone bankrupt and even the profits of other Chinese Dairy companies have suffered.