Americans have been enjoying a drop in the normally high prices of milk products this year.
In China, the opposite is happening. Chinese dairy products are the now among the most expensive in the world. Behind the high prices stand neither supply shortages or demand increases. There’s plenty of domestic supply for milk products, and it’s even cheap.
But a series of scandals have made Chinese consumers suspicious of domestic supplies.
Two weeks ago, China’s dairy giant Inner Mongolia Yili recalled formula tainted with mercury, which can cause neural damage. The recall evoked memories of the 2008 scandal when six Chinese babies died before inspectors discovered that their milk was contaminated with the industrial chemical melamine. The deaths caused a nationwide panic.
Many Chinese parents now take every opportunity to obtain milk from foreign countries. They ask friends, relatives and colleagues to bring powdered milk back from their travels to Western countries. Some couples will even assess a country’s milk industry before they decide to travel.
The demand for powdered milk in China has led other countries to erect barriers to sales of the product. In 2010, Dutch shops capped the amount of powdered milk customers could purchase, partly because of Chinese tourists. This year, a flood of Chinese milk buyers led New Zealand supermarkets to limit the amount customers could take home.
Chinese cities are also placing limits on powdered milk sales. Hong Kong is a hot city for Chinese milk seekers who cannot go abroad. Fights broke out in Hong Kong when shoppers were barred from buying as much milk as they wanted, said a report in Monsters and Critics.
Food and pharmaceutical scandals have sparked innovation in China. A new iPhone app, the China Survival Guide, launched last month. It tracks thousands of food scandals around the country and sends warnings about products, especially dairy items, to users. The app was downloaded over 200,000 times in its first week.
China is also trying to change production habits. Last week, the country’s biggest maker of dairy products, Mengniu Dairy Co LTD, signed an agreement with Danish-Swedish dairy group Arla Foods. Arla will buy a six percent stake in the Chinese company, gaining a foothold in the world’s largest market while sharing its advanced technology. Mengniu gets advice on how to make better dairy products.
Will such efforts improve Chinese citizens’ attitude towards Chinese milk? Perhaps not. Mr. Zhu, a father of a two-year-old-girl, told the Chinese news site Zaobao that he doubted such cooperation would improve domestically produced milk. He still only trusts milk from foreign countries.