LIQUID MILK IN CHINA: A MARKET ANALYSIS

TABLE OF CONTENTS

CHINA CONTACT I

CONTENTS II

INTRODUCTION

Report Coverage

Executive Summary

Other Reports

Glossary

Free Monthly Online Newsletters

China Fast Facts

Regions of China

Map A.1 CHINA: PROVINCES AND MUNICIPALITIES

CHINA's DAIRY MARKET OVERVIEW

1 CHINA's MILK MARKET

1.1 Milk Sector: Values & Volumes

Table 1.1 LIQUID MILK RETAIL MARKET VALUE & VOLUME SALES IN CHINA, 1996-2002

1.2 Milk Sector: Market Breakdown

Table 1.2 PERCENTAGE BREAKDOWN OF LIQUID MILK VALUE & VOLUME RETAIL SALES, 1996-2002

1.3 Milk Sector: Market Growth

Table 1.3 % ANNUAL GROWTH FOR LIQUID MILK VALUE & VOLUME RETAIL SALES, 1996-2002

2 NATIONAL MARKET SHARES

2.1 Market Shares: Foreign Penetration

Table 2.1 FOREIGN PENETRATION OF CHINA's DAIRY MARKET 1995-2000

Table 2.2 FOREIGN PENETRATION OF CHINA's DAIRY MARKET SECTORS 2000

2.2 Market Shares: Total Dairy Market Value Shares

Table 2.3 TOP 10 NATIONAL DAIRY COMPANIES IN CHINA BY SALES REVENUE 2001

2.3 Market Shares: Total Dairy Market Volume Shares

Table 2.4 TOP 10 NATIONAL DAIRY COMPANIES BY SALES VOLUME 2000

2.4 Market Shares: Total Liquid Milk Sector Volume Shares

Table 2.5 TOP 10 NATIONAL MILK COMPANIES BY SALES VOLUME 2000

2.5 Major Players by Sector

Table 2.6 THE MAJOR PLAYERS IN CHINA's DAIRY MARKET BY SECTOR 2002

3 MILK MARKET SHARES BY CITY

3.1 Milk Sector Shares by City: Beijing

Table 3.1 LEADING COMPANY SHARES OF RETAIL MILK SALES IN BEIJING 2000-2002

3.2 Milk Sector Shares by City: Shanghai

Table 3.2 LEADING COMPANY SHARES OF RETAIL MILK SALES IN SHANGHAI 2000-2002

3.3 Milk Sector Shares by City: Guangzhou

Table 3.3 LEADING COMPANY SHARES OF RETAIL MILK SALES IN GUANGZHOU 2000-2002

3.4 Milk Sector Shares by City: Wuhan

Table 3.4 LEADING COMPANY SHARES OF RETAIL MILK SALES IN WUHAN 2000-2002

3.5 Milk Sector Shares by City: Xi�an

Table 3.5 LEADING COMPANY SHARES OF RETAIL MILK SALES IN XI�AN 2000-2002

3.6 Milk Sector Shares by City: Shenyang

Table 3.6 LEADING COMPANY SHARES OF RETAIL MILK SALES IN SHENYANG 2000-2002

4 PRICES

4.1 Prices: Retail Price Indices

Table 4.1 RETAIL PRICE INDICES BY BROAD SECTOR, 1996-2002

4.2 Prices: Average Unit Values Dairy Products

Table 4.2 AVERAGE UNIT RETAIL PRICES OF LIQUID MILK, 1996-2002

Table 4.3 GROWTH OF AVERAGE UNIT RETAIL PRICES OF LIQUID MILK, 1996-2002

4.3 Prices: Selected Retail Prices

Table 4.4 RETAIL PRICES ON SELECTED LIQUID MILK PRODUCTS 2000-2003

5 OUTLOOK

5.1 Outlook: Forecast Trends

5.2 Outlook: Total Market Size

Table 5.1 FORECAST VALUE & VOLUME SALES OF LIQUID MILK IN CHINA 2003-2007

5.3 Outlook: Sector Breakdown

Table 5.2 FORECAST PERCENTAGE VALUE & VOLUME BREAKDOWN OF LIQUID MILK IN CHINA, 2003-2007

5.4 Outlook: Sector Growth

Table 5.3 FORECAST ANNUAL VALUE & VOLUME GROWTH OF LIQUID MILK IN CHINA 2003-2007

6 CURRENT ISSUES

6.1 Current Issues: Legislation

6.2 Current Issues: New Products/Brands

6.3 Current Issues: Health Promotion

6.4 Current Issues: Strengthening the Dairy Industry

6.5 Current Issues: August Dairy Product Exhibition

6.6 Current Issues: China's Dairy Industry Facing the WTO Challenges

The Disadvantages of China's Dairy Industry

Competitive Focus After WTO Entry

Table 6.1 WTO IMPACT ON CHINA's DAIRY IMPORT TARIFFS

Possible Need to Shield China's Dairy Industry

6.7 Current Issues: Breast Feeding

6.8 Current Issues: Chinese Breast Feeding Rates & Policies

Table 6.2 EXCLUSIVE BREAST-FEEDING RATES IN CHINA 1992-1999

6.9 Current Issues: Comparative Global Breast Feeding Rates

Table 6.3 EXCLUSIVE BREAST FED RATES UP TO FOUR MONTHS

Table 6.4 EVER BREAST FED RATES

6.10 Current Issues: Nitrite Levels in Formula Milk

7 MARKETING AND DISTRIBUTION

7.1 Marketing

7.1.1 Marketing: Packaging Trends

7.1.2 Marketing: Packaging Trends

7.1.3 Marketing: Refrigerated Cabinets

7.1.4 Marketing: Advertising

7.2 Consumer Profile

7.2.1 Consumer Profile: Development of the Dairy Market

Table 7.1 TARGET MARKETS FOR DAIRY PRODUCERS IN CHINA

Table 7.2 TIME OF DAY MOST CONSUMERS EAT DAIRY PRODUCTS IN CHINA

7.2.2 Consumer Profile: Milk Consumption

Table 7.3 CONSUMTPION PATTERNS FOR PACKAGED MILK IN CHINA's MAJOR CITIES 2002

7.3 Distribution

7.3.1 Distribution: Regulations Specific to Dairy Products

7.3.2 Distribution: Dairy Product Import Duty Rates

7.3.3 Distribution: Wholesale Distribution

7.3.4 Distribution: Milk Distribution to Schools

7.3.5 Distribution: Retail Sales by Outlet

Table 7.4 PERCENTAGE BREAKDOWN OF DAIRY PRODUCTS SALES BY OUTLET TYPE 2000

8 SOURCES OF SUPPLY

8.1 Manufacturing

8.1.1 Manufacturing: Foreign Competitor Considerations

8.1.2 Manufacturing: General Shape of the Industry

Table 8.1 BASIC SITUATION OF DAIRY PROCESSING 1994-1998

Table 8.2 SIZE OF CHINESE DAIRY PROCESSING ENTERPRISES 1998

8.1.3 Manufacturing: Liquid Dairy Products

Table 8.3 STRUCTURE OF LIQUID DAIRY PRODUCTION 1997-2000

Table 8.4 GROWTH OF LIQUID DAIRY PRODUCTION 1997-2000

Table 8.5 RECENT GROWTH OF LIQUID DAIRY PRODUCTS 1997-2000

8.1.4 Manufacturing: Milk Powder

Table 8.6 MILK POWDER PRODUCTION 1990-2001

8.1.5 Manufacturing: Product Quality

Table 8.7 SAMPLE TEST ON DAIRY QUALITY IN PART 2000

Table 8.8 UNQUALIFIED PRODUCER NUMBER OF MILK POWDER 2000

8.1.6 Manufacturing: Raw Milk Quality Problems

8.1.7 Manufacturing: Mergers and Acquisitions

8.1.8 Manufacturing: Regional Distribution

Table 8.9 DAIRY PRODUCTION BY KEY PRODUCTION REGION 1998-2000

8.1.9 Manufacturing: Dairy Product Output by City

Table 8.10 PRODUCTION DAIRY PRODUCTS BY MAJOR CITY OF PRODUCTION 2001

8.1.10 Manufacturing: Regional Milk Production

Table 8.11 OUTPUT OF ALL MILK IN CHINA BY PROVINCE 2001

8.1.11 Manufacturing: China's Growth in Milk Production by International Standards

Table 8.12 CHINA's GROWTH IN MILK PRODUCTION COMPARED TO OTHER MAJOR GLOBAL PRODUCERS 2001

8.1.12 Manufacturing: Output Value

Table 8.13 OUTPUT VALUE BY BROAD SECTOR 1995-2000

8.1.13 Manufacturing: Output Volume

Table 8.14 OUTPUT VOLUME BY BROAD SECTOR 1995-2000

8.2 Imports

8.2.1 Imports: Value

Table 8.15 IMPORT VALUE OF LIQUID MILK INTO CHINA, 1993-1997/2000

8.2.2 Imports: Volume

Table 8.16 IMPORT VOLUME OF LIQUID MILK INTO CHINA, 1993-1997/2000

8.2.3 Imports: Significance

Table 8.17 IMPORTS AS A % OF RETAIL SALES OF LIQUID MILK INTO CHINA, 1995/1997/2000

8.3 Exports

8.3.1 Exports: Value

Table 8.18 EXPORT VALUE OF LIQUID MILK FROM CHINA, 1993-1997/2000

8.3.2 Exports: Volume

Table 8.19 EXPORT VOLUME OF LIQUID MILK FROM CHINA, 1993-1997/2000

8.3.3 Exports: Significance

Table 8.20 EXPORTS AS A % OF DOMESTIC OUTPUT OF LIQUID MILK FROM CHINA, 1995/1997/2000

9 SWOT ANALYSIS

9.1 Strengths

9.2 Weaknesses

9.3 Opportunities

9.4 Threats

10 DOMESTIC COMPANY PROFILES

10.1 Beijing Sanyuan Foods Company Ltd

10.1.1. Beijing Sanyuan Foods: Company Details

10.1.2 Beijing Sanyuan Foods: Company Background & China Activities

10.1.3 Beijing Sanyuan Foods: Financial Summary

Table 10.1 BEIJING SANYUAN FOODS COMPANY LTD: FINANCIAL RESULTS 1998-2000*

Table 10.2 BEIJING ENTERPRISES HOLDINGS LTD.: FINANCIAL RESULTS 1998-2000

10.2 Beijing Today Aussie Trading Co. Ltd.

10.3 Hangzhou Wahaha Group Corporation

10.3.1 Hangzhou Wahaha Group Corporation: Company Details

10.3.2 Hangzhou Wahaha Group Corporation: Company Background

10.3.3 Hangzhou Wahaha Group Corporation: Dairy Activity

10.3.4 Hangzhou Wahaha Group Corporation: Financial Results

Table 10.3 HANGZHOU WAHAHA GROUP CORPORATION: FINANCIAL RESULTS 1995/1996

10.4 Harbin Dairy Equipment Manufacturing Company Ltd.

10.5 Harbin Jinxin Dairy (Group) Co. Ltd.

10.6 Heilongjiang Wandashan Group

10.7 Hengshoutang Calcium Milk Company Ltd.

10.8 Inner Mongolia Yili Industrial Company Ltd

10.8.1 Inner Mongolia Yili Industrial Co. Ltd: Company Details

10.8.2 Inner Mongolia Yili Industrial Co. Ltd: Company Background

10.8.3 Inner Mongolia Yili Industrial Co. Ltd: Dairy Activities

10.8.4 Inner Mongolia Yili Industrial Co. Ltd: Financial Results

Table 10.4 INNER MONGOLIA YILI INDUSTRIAL CO. LTD: FINANCIAL RESULTS 1997-2000

10.9 Shandong Pengcheng Food Co. Ltd.

10.10 Shanghai Guangming (Bright) Dairy & Food Co. Ltd.

10.10.1 Shanghai Guangming: Company Details

10.10.2 Shanghai Guangming: Company History

10.10.3 Shanghai Guangming: Structural Background

10.10.4 Shanghai Guangming: Dairy Activities

10.10.5 Shanghai Guangming: Financial Results

Table 10.5 SHANGHAI GUANGMING (BRIGHT) DAIRY & FOOD CO. LTD: FINANCIAL RESULTS 1997-2000

10.11 Shanghai Industrial Holdings Ltd

10.11.1 Shanghai Industrial Holdings: Company Background

10.11.2 Shanghai Industrial Holdings: Shanghai Kedi Convenience Stores Company Ltd

Table 10.6 SHANGHAI KEDI CONVENIENCE STORES: FINANCIAL RESULTS 1997/1998

10.11.3 Shanghai Industrial Holdings: Shanghai Orient Shopping Centre

10.12 Shanghai Kanglin Milk Products Company No.1 Factory

10.13 Shanxi Gucheng Dairy Products Group Ltd.

10.14 Shijiazhuang Sanlu Group Company Ltd

10.14.1 Shijiazhuang Sanlu Group: Company Details

10.14.2 Shijiazhuang Sanlu Group: Company Background

10.14.3 Shijiazhuang Sanlu Group: Dairy Activities

10.14.4 Shijiazhuang Sanlu Group Co. Ltd: Financial Results

11 FOREIGN COMPANY PROFILES

11.1 Barlile

11.2 Bravo! Foods International (formerly China Premium Food Corporation)

11.2.1 Bravo! Foods International: Company Details Key personnel

11.2.2 Bravo! Foods International: China Operations

Table 11.1 BRAVO FOODS: FINANCIAL RESULTS 2001/2002*

11.2.3 Bravo! Foods International: Looney Tune Dairy Products

Table 11.2 BRAVO! FOODS INTERNATIONAL: PRICES 2001

11.3 CAFL

11.4 Groupe Danone

11.4.1 Groupe Danone: Company Details

11.4.2 Groupe Danone: Company Background

11.4.3 Groupe Danone: China Operations

11.4.4 Groupe Danone: Financial Results

Table 11.3 GROUPE DANONE: FINANCIAL RESULTS 2001/2002*

11.4.5 Groupe Danone: Future Strategy

11.5 Hung Yip

11.6 Morinaga Milk Industry

Table 11.4 MORINAGA: FINANCIAL RESULTS 2001/2002*

11.7 Nestl�ESA

11.7.1 Nestl�E Company Details

11.7.2 Nestl�ESA: Company Background

Table 11.5 NESTLÉ: FINANCIAL RESULTS 2001/2002*

11.7.3 Nestl�ESA: China Operations

11.7.4 Nestl�ESA: Future Strategy

11.8 New Zealand Dairy Board

11.9 Parmalat Finanziaria S.p.A.

11.9.1 Parmalat: Company Details

11.9.2 Parmalat: Company Background

11.9.3 Parmalat: China Activities

11.12 Victorian Dairy Industry Association

12 CONTACTS

12.1 Trade Organisations

12.1.1 China Dairy Federation

12.1.2 China National Cereals, Oils & Foodstuffs Import & Export Corporation

12.1.3 All-China Federation of Industry & Commerce

12.1.4 China Dairy Industry Association

12.1.5 National Dairy Industry Information Center

12.2 Government Departments

12.2.1 State Economic and Trade Commission �EState Light Industry Bureau

12.2.2 Ministry of Agriculture

12.2.3 Milk Quality Supervision Centre with the Ministry of Agriculture

13 RELEVANT EXHIBITIONS & TRADE FAIRS

13.1 International Packing, Printing, Food Processing & Packaging & Plastic Machinery Fair (Hangzhou)

13.2 Tianjin Exhibition on Food Machinery & Packing

13.3 Trade Show of Machinery for Print, Packaging, Plastic Products & Food

13.4 Food Ingredients & Food Ingredients Asia

13.5 Agro-Foodtech

13.6 SIAL China

13.7 International Fast Food Products Exhibition

13.8 Zhengzhou Sugar, Alcoholic Drink & Food Trade Show

13.9 Guangzhou Exhibition on Machinery for Food, Packaging, Printing & Plastics

13.10 China Northeast International Exhibition on Food, subsidiary Material, Processing Technology & Equipment

13.11 International Exhibition For Food & Drink South China

13.12 International Exhibition For Hotel & Bakery South China

13.13 International Quick Frozen Food Exhibition

13.14 Beijing National Food & Food Processing Machine & Packaging Machinery Show

13.15 Food China

13.16 International Food, Packaging, Print, Plastic Products Exhibition

13.17 Zhejiang Food & Drink Summer Sales Show

13.18 Dalian International Food Manufacturing & Packaging Machine Exhibition/Dalian International Food, Raw Materials & Food Additives Show

13.19 Shanghai International Food Machine & Package Machine Expo

13.20 China International Fair For Food, Food Processing & Packaging

13.21 Shanghai International Supermarket Expo

13.22 Shanghai International Food Expo

13.23 Packtech & Foodtech

13.24 Liaoning Food Show

13.25 Food & Hotel South China

13.26 Chengdu International Food, Food Processing & Packaging Show

13.27 International Food Show

13.28 Interfood Shanghai

13.29 International Food Processing & Packaging Machinery Exhibition

13.30 China Food Industry Exhibition

13.31 China International Dairy Product & Technology Exhibition

APPENDIX: EXCHANGE RATES

A1 Exchange Rates: China

Table A1 AVERAGE ANNUAL EXCHANGE RATES, 1997�E002

A.2 Exchange Rates: Hong Kong

Table A2 AVERAGE ANNUAL EXCHANGE RATES, 1997�E002