Dairy industry overhaul a chance for revival
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For China's thousands of small and medium-sized dairy factories, March 1 may become a doomsday.
Some may be closed down or bought up by larger entities, if they fail to purchase expensive equipment to test for harmful substances such as the notorious melamine, and to meet various quality standards, by this deadline.
But for the industry as a whole, this is a decisive moment that may help the Chinese companies win back the domestic market, more than half of which is believed to be cornered by foreign brands.
It is not that Chinese dairy brands are inherently weaker. There are a dozen industry giants nationwide, and Chinese people used to enjoy drinking milk produced from local farms, and buying dairy products made by local brands.
Before the melamine-tainted milk incident broke out in 2008, domestic brands still held more than 60 percent of the Chinese market. How-ever, their share has dropped consistently since then, and in large cities such as Beijing and Shanghai, more than 80 to 90 percent of families opt to buy foreign milk powder for their children.
Industry analysts warn that once the foreign brands begin to dominate the Chinese market, they will also gain the power to set prices.
A number of foreign brands raised their retail prices in China several times last year. This hurts Chinese consumers in the end, as no matter how much they spend on foreign brands, they cannot afford to risk their babies' health with iffy Chinese milk products.
What the Chinese parents are paying for is a sense of safety.
Dairy companies in the United States, Australia, New Zealand and Europe do not necessarily have a better sense of quality and safety. Cows and their feed in China are not necessarily inferior to foreign ones. Quite independently, it is the strict supervision and industry quality standards enforced by their respective authorities that ensure the safety of what people eat and drink.
After the painful milk powder scandals that left numerous babies sick, the Chinese government has resolved to clean up the dairy industry.
For a period of time, some workers will temporarily lose their jobs, while smaller plants may go out of business. But in the long run, the industry reshuffle offers light at the end of the tunnel.
This is not a battle to defeat foreign invaders - even if China bans all foreign milk products, people will still try to obtain them through alternative channels - It is a battle to retrieve Chinese consumers' confidence for their home brands.
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