November 5, 2014
Food scares open China window for EU dairy producers
Dairy firms from the European Union now have a better opportunity to enter the Chinese market than at any other time due to safety food issues hounding a few countries including New Zealand, where China sources 80% of its dairy product requirements.
A visiting Irish trade delegation was recently told that China has a growing market for such dairy products as milk powders, whey and UHT milk.
Sandy Chen, a China-based dairy research specialist of the food and agri-financing Rabobank, told the delegation that domestic milk production "is on the increase," although "in relative terms, it is not keeping pace with the increase in China''s growing demand for dairy products."
"Moreover, most of this additional milk is being produced from imported corn and soya. So it is not cheap," he pointed out.
He said that safety of dairy supply was a key driver for Chinese consumers and that "New Zealand has been at the centre of a number of food scares over recent years."
"As a consequence," the Rabobank specialist explained, "Chinese importers have sought to diversify their sources of dairy product supply. And this is, potentially, good news for milk processers in the EU. New Zealand currently supplies 80% of China''s imported dairy requirements. This figure could well drop over the coming years."
Last year New Zealand''s dairy giant Fonterra was fined NZD300,000 (US$256,675) after it admitted four food-safety violations during a botulism scare that led to a worldwide milk product recall. Several countries also blocked imports of New Zealand dairy products. Subsequent tests found, though, that there had been no problem with the firm''s products.
Botulism is a disease of the nervous system acquired from spoiled foods due to improper canning or marination of foods. The disease can sometimes be fatal.