Chinese entrepreneurs milk Germany's supply

"A delicious, tasty and safe product for Chinese children, and their parents”, blasts a video ad for German pasteurised milk aimed at the Chinese market. Germany, the world’s third-largest milk producer, is making its presence felt in China, a country with insatiable demand for milk, but a local trade association says they are only seeing a small part of the benefits of Chinese demand.

“We don’t make the big bucks in milk exports to China, it must be the distributors or retailers in China.” said Eckhard Heuser, managing director of the nation’s leading dairy producers’ lobbying group, the Milchindustrie-Verband.

“According to customs data, we are selling our milk at around €0.60 per litre to China, on par with local prices, but our milk ends up being sold for a more than two Euros per litre there,” he said.

A survey by market researcher Gfk backs this statement up finding that a litre of pasteurised milk costs between €0.63 and €0.68, including tax, in Germany. In Chinese supermarkets, German milk can sell for several times the price.

Despite the high margins, milk exports are booming. Last year, exports of drinkable milk reached 47,300 tonnes, 91 times more than Germany sold to China five years ago, according to the trade association’s statistics. Exports are expected to at least double again this year.

During this year’s first five months, Germany exported 38,190 tonnes to China, an increase of 138 per cent compared to the same period a year earlier. China is already Germany’s largest costumer of milk products outside Europe.