Did imported German milk deceive Shanghai shoppers?

By Ni Dandan Source:Global Times Published: 2015-11-29 18:38:01

China's obsession with foreign brands is one of the driving forces behind the growth of our country's consumption levels. But discerning Chinese consumers are just as quick to abandon a brand as they are to buy it, as evinced recently during China's latest milk scandal, this time involving a German product.

During this month's 11/11 national shopping day, imported milk brand Weidendorf made headlines for selling out 250,000 cases on e-retailer Taobao within 24 hours. Immediately after 11/11, however, it was reported in local media that Weidendorf is not a German brand but rather a locally owned company. Further investigation by concerned netizens revealed that Weidendorf is in fact not sold in any shops or retail channels in Germany.

Following a series of scandals involving domestic dairy producers, confidence in Chinese milk and infant formula has over the past five years been on the decline. Against this skepticism, imported UHT (ultra-high-temperature) milk has become the new favorite of Chinese families.

A sight unseen even just a few years ago, Shanghai supermarkets today have entire aisles dedicated to foreign UHT milk from European nations. At any of the city's RT-Mart or Carrefour locations, for example, imported UHT milk often outnumbers fresh domestic milk 10:1.

Even though UHT milk boxes display a foreign flag or other colorful marketing gimmicks boasting their "imported" status, simply reading the back of the box will reveal that many of these products are in fact owned by Chinese companies. In addition to Weidendorf, German milk brand SUKI is also owned by a Shanghai company. The Australia's Own Kid's Milk brand is registered not in Australia but in Shenzhen.

Soon after Weidendorf was exposed as a Shanghai company, the company made a public statement emphasizing that even though it is Chinese-owned, all of its products are sourced in Germany and meet relevant EU standards. What this means is that Weidendorf was founded and registered in China, but opened a factory in Germany to complete the raw material manufacturing and packaging. The final product is then shipped back to China for exclusive distribution here.

It is perfectly legal albeit misleading to claim that their product is "imported." Knowing the mind-set of middle-class Chinese families who have grown weary of domestic dairy, it's simply a business move to downplay the fact that their milk belongs to a Chinese company. In the West this is known as "buyer beware," meaning that the company leaves it up to shoppers to read a product's fine print.

Putting a foreign flag on the box is not the only crafty move these Chinese-owned milk imports have made. Their extremely competitive prices have also ensured them a loyal following from Chinese shoppers. Compared with 20 yuan ($3.12) for 1 liter of fresh Chinese milk, a liter of imported UHT milk averages only 12 yuan, and oftentimes as low as 9 yuan as they near their expiration date.

What's important to note is that Chinese people are generally lactose intolerant, meaning that fresh domestic milk is watered down to contain less dairy than foreign "full cream" milk. But with the growing popularity of imported UHT milk, Chinese are now consuming far more lactose than they ever have before, which may be contributing to rising obesity rates among Chinese children.

The other downside to this anomaly is that UHT thermal processing affects nutrients in milk, leaving the true levels of its protein and vitamins unknown even to its producers. Experts are divided on this issue, with many Chinese scientists claiming that nutrition in UHT milk is somewhat similar to what can be acquired from everyday rice or noodles, rendering (in their opinion) imported milk obsolete.

UHT milk is popular in European countries with hot climates such as Spain and Italy due to its ability to not require any refrigeration, whereas colder countries like Germany and the UK still prefer fresh pasteurized milk. Ironically, many of the imported milk brands sold in China hail from these colder countries; obviously they have had to export their products in order to maintain sales, which is why you won't see Weidendorf in any German stores.

Thus, the Weidendorf milk scandal is not really a scandal, yet local consumers remain understandably upset by their deceitful marketing tactics and lack of disclosure. How to regain the confidence of Chinese consumers is an issue the domestic and international dairy industries still need to work out so that local shoppers no longer have to go in blind when deciding between domestic or so-called imported milk.

The opinions expressed in this article are the author's own and do not necessarily reflect the views of the Global Times.

Posted in: TwoCents, Metro Shanghai, Pulse

blog comments powered by Disqus