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Customers sour to bigger milk brands

By Zhang Qi (China Daily)
Updated: 2008-10-18 13:32

China's smaller dairy producers may be set to gain from the recent melamine crisis, as consumers take cautious steps to switch away from bigger name brands, a recent study compiled by a consulting firm All Media Count (AMC) revealed.

The industrial chemical, first found last month in some domestic milk products, has had a negative impact on China's major dairy producers, including Inner Mongolia Mengniu and Yili. It has killed four infants and sickened more than 54,000 children in China.

Beijing-based AMC's latest report indicated that with the major brands exposed to the contamination, smaller domestic ones are well positioned to win over customers.

In the study, about 60 percent of the 900 people questioned identified Mengniu and Yili products as being tainted.

In an industry-wide scandal, it is the more well-known brands that tend to be remembered if they are associated with the incident.

Although only about one quarter of their loyal customers say they would avoid the brands in the future, many more say they are open to alternative milk brands, the study said.

Nearly two-thirds of shoppers formerly loyal to Mengniu now say they are looking for alternatives.

"Most consumers who used to buy two or more brands of milk a month, now say they will stick to just one. That will mean a lot less brand switching, and a lot less sensitivity to prices," said AMC's Managing Director Mike Underhill.