Fresh milk not a staple for Guangzhou dairy brands

It is impossible for all of the dairy brands in Guangzhou, Guangdong province, to ensure that their products are made with fresh milk because there is a limited supply of it, according to a local diary management official.

Wang Dingmian, deputy director of the Guangzhou Dairy Industry Management Office, said at a symposium in Guangzhou on Saturday that there are 20,000 cows in the city, with only half of them able to be milked. In order to meet demand, dairy companies have to transport milk from other cities to Guangzhou.

"However, the amount of fresh milk produced locally and transported from other cities covers only 50 to 60 percent of the market demand in Guangzhou," Wang said. "The rest has to be filled with reconstituted milk that is a mixture of imported milk powder and water."

As an executive council member of the Dairy Association of China, Wang also shed light into the National Development and Reform Commission's ongoing investigation into the pricing of foreign brands of baby formula sold in China.

"The prices of foreign brand baby formula sold in China double that sold overseas," Wang said, citing his survey last year on baby formula in more than 20 countries.

The average price of a pot of infant formula sold overseas is 120 yuan ($19.50), while it costs more than 250 yuan in China for a pot of the same brand, Wang said.

"The domestic infant formula market is now dominated by foreign brands, with these brands taking about 60 percent of the market share," Wang said.

He added that besides infant formula, milk from foreign brands is also taking a bigger piece of the domestic market.

According to Wang's survey in January, there are 33 brands of milk from 28 countries in the market in Guangzhou.

"Before the melamine-tainted milk scandal in 2008, there were only one or two foreign milk brands in the country," Wang said.