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Ice Cream Makers Vie for Share

Five dominant players are preparing to do battle in Shanghai's ice cream market by launching new products, hoping to expand market share.

Nestle (China) Ltd has introduced more than 20 products, which account for 75 percent of its total portfolio.

Inner mongolia-headquartered Mengniu Dairy Co Ltd plans to launch an almost similar number of products.

In the meantime, Wall's (China) Co Ltd has started to broadcast commercials during prime time on local television channels to create awareness of its new ice cream.

Bright dairy & Food Co Ltd, which is operating an ice cream business for the first time, has created a new logo for the popular "Bright" ice cream.

Last year, Bright Dairy took over Shanghai Yimin No. 1 Food Co Ltd that previously owned the "Bright" brand.

The company hopes its diversification would help it increase earnings.

Shanghai sells around 80,000 tons of ice cream products annually. The top five brands - Wall's, Bright, Yili, Nestle, and Mengniu - dominated the Shanghai market with a combined market share of up to 85 percent last year, according to the Shanghai Frozen Food Association.

"Although the size of Shanghai's ice cream market remains almost unchanged in recent years, the city is a battleground that major players won't neglect and can't afford to lose," said Jin Zuwei, the association's secretary-general.

"In 2004, the market will see some subtle changes. But the changes will be mainly among the five strongest players since there is hardly any room left for newcomers."

Nestle, the world's largest food maker, is aggressively expanding its ice cream business and expects to become the market leader within five years.

"The ice cream sector is one of the four major businesses of Nestle. We will give Chinese consumers more products at affordable prices," said Ken Donaldson, head of Nestle's China ice cream unit.

"This year, we will improve our logistics system and target women and young people in particular."

Meanwhile, dairy giant Mengniu said it aims to tap the high-end market. The company recently launched an ice cream product costing 3 yuan, unlike most of its products which usually cost between 1 and 2 yuan.

(Eastday.com March 29, 2004)

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