Global dairy prices close to five year low price war speed up domestic milk enterprise reshuffle

On July 15, fonterra dairy global trade platform of whole milk powder sale price for nine losses. Similarly, in recent days, the famous American milk powder enterprise mead Johnson also sales growth in 2015, earnings per share index were significantly lower; Company is expected to, at a constant rate, expect this year's sales growth range from 7% to 7% ~ 7%.

The personage inside course of study concerns, in the international dairy prices, and under the situation of excess production capacity, domestic dairy industry will also suffer a period of time in the price war. On July 23, dairy experts bass in an interview with reporters, said the second half of the year there will be more enterprises lower performance targets, as the price of the milk powder into the downlink channel for a long time, China's infant powder into small profit era.

Mead Johnson lower earnings expectations

Fonterra dairy global trade platform of whole milk powder sale prices have been falling. In September, according to the delivery of 4750 tonnes of auction; January 2016 to December delivery, port of whole milk powder declined from $2054 a tonne to $1895 a tonne, more this month 1, clinch a deal the price 10.7% lower.

Dairy industry upstream raw material prices decline has influence to the downstream industry, mead Johnson cut this year became the first public performance of enterprise; Its 2015 financial forecasts in recent update, said in a preliminary estimation, on the basis of mead Johnson at a constant rate in the second quarter of this year sales fell 3% year on year, if the calculation of foreign exchange, this number will fell 7% year on year.

Mead Johnson said at the same time, dairy products currently in nearly five years of low price, because of a drop in prices caused by the influence has appeared in several markets, including Latin America, Asia, and the Chinese market the most obvious.

Afternoon, July 23, mead Johnson (China) in response to a reporter said in an interview, because the company has not yet completed process for the ending of the second quarter, the results are preliminary forecast at present. This year the company in North America, Europe continued strong performance of the market, in China to implement the transformation of strategy also showed satisfactory preliminary results, new imported products is strong.

Mead Johnson said the company through a series of new measures, and constantly strengthen the channels of electricity, the Chinese market can be recorded at the end of this year continued sales growth.

More than 2000 dairy products brand

In June last year started a price war, make China has experienced the most difficult period in the history of milk powder; Previously, this just need like real estate, consumer goods prices firm for ten years.

Bass told reporters that in the first half of this year in the dairy industry keywords is a price war, offline channels is given priority to with promotion price, online channels can discount or low price products. "Import brand all prices, domestic brand of the highest drop of 50%." However, consumers do not seem to buy it. In terms of sales, as prices downward, the future China's infant milk powder sales growth will slow down significantly, in 2015 is expected to increase to 9%.

A domestic dairy companies marketing manager said to the reporter, although the company has not make adjustments to this year's sales target, but in the first half of the day really hard. , is the director of a listed company brand under the condition of the market downturn, the company also in compression cost, in order to maintain the original product profit margins.

Bass notes that China's dairy market has more than 2000 brands, severe overcapacity, exit the market price on the one hand, makes a large number of small brands, on the one hand, the compression channel profit, specialization of reversed transmission channels to upgrade.

Bass said at the same time, the price war make domestic milk powder, whole price system down, speed up industry merger and reorganization, also can inhibit excessive capital investment and overseas new operators into the milk powder, infant milk powder in China competition has entered the stage of the red sea in advance.