China's Dairy Producers to Face Weaker Sales Amid Preference Shift, Growing Competition, S&P Says

MT Newswires Live01-13

S&P Global Ratings expects China's dairy producer sales to weaken in the next 12 to 18 months amid changing consumer preferences and heightened competition between large and small players, according to a Tuesday release.

The rating agency sees the biggest producers to take the hardest hit, including Bright Food (Group) subsidiary Bright Dairy & Food (SHA:600597), China Mengniu Dairy (HKG:2319), and Inner Mongolia Yili Industrial Group (SHA:600887).

These large players could face unsteady revenue amid weaker UHT milk demand and smaller players pivoting to faster-growing fresh categories, S&P said.

New functional products will unlikely have a strong impact in the next 12 to 18 months, although focusing on new commercial channels could aid in offsetting industry weaknesses, the rating agency said.

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