The one export China can't get enough of with sales of a2 Milk baby formula DOUBLING in just one year despite a looming trade war with Australia

This post was originally published on this site

China‘s demand for one particular export has doubled in just one year despite a series of trade threats.

The Communist power’s sanctions against Australia for perceived slights has failed to dent the finances of The a2 Milk Company, which is listed on the Australian share market.

Sales of its baby formula effectively doubled to $NZ337.7 million ($A316million) during the last financial year, and a2 has a $A250million aggressive expansion plan to increase its customer base in China.

The Trans-Tasman dairy firm has been exporting it a2 Platinum infant food to China since 2013.

During the last financial year, sales to China of The a2 Milk Company’s baby formula have effectively doubled to $NZ337.7 million ($A316million)

Almost a quarter or 24 per cent of its infant formula is sent to China and that is before Chinese daigou networks in Australia hoard the product and ship it over for customers in mainland China.

University of New South Wales trade expert Professor Tim Harcourt, a former chief economist with federal government agency Austrade, said Chinese consumers valued Australian and New Zealand food standards over their own country’s. 

‘They’re very worried about their own health and safety standards in China and the baby formula is just guaranteed quality,’ he told Daily Mail Australia. 

Professor Harcourt said Chinese tariffs on Australian dairy products would fail to dent demand.

‘China needs Australia, it needs our goods, it needs our energy, it needs our food products and that’s not going to change despite the rhetoric of the Chinese Communist Party,’ he said. 

The a2 Milk Company’s baby nutrition products are now sold at 19,100 Chinese stores and it is expecting demand there to keep soaring.

‘In China, we remain focused on strengthening our infant nutrition position in-market which we believe still has significant runway for growth,’ its annual report said.

The a2 company is so focused on Chinese expansion that on Christmas Eve, chief executive Geoff Babidge announced it would buy a 75 per cent stake in Mataura Valley Milk, a dairy company based at Southland at the very bottom of New Zealand’s South Island.

Mataura, a struggling baby formula company, is majority owned by the state-owned China Animal Husbandry Group.

Almost a quarter or 24 per cent of its infant formula is sent to China and that is before Chinese daigou networks in Australia hoard the product and ship it over for customers in mainland China

‘The proposed acquisition will provide the opportunity for a2MC to participate in nutritional products manufacturing, provides supplier and geographic diversification, and strengthens our relationship with key partners in China,’ a2 told the Australian and New Zealand share markets.

Should the New Zealand Overseas Investment Office approve the $NZ268.5million ($A251million) takeover bid, the transaction would be completed on May 31.

In August 2018, a2 entered into an arrangement for state-owned agriculture business China State Farm to distribute its baby formula products there.

A signing ceremony was held at Parliament House in Canberra with then trade minister Steven Ciobo and Zhao Qing Yong, the general manager of the Shanghai-based China State Farm Holding. 

The a2 company is so focused on Chinese expansion that on Christmas Eve, chief executive Geoff Babidge announced it would buy a 75 per cent stake in Mataura Valley Milk, a dairy company based at Southland at the very bottom of New Zealand’s South Island