New Food Packaging Standards Promote Clearance Promotions

According to industry insiders, last year, the price of international milk resources fell all the way, and many dairy companies increased their imports, resulting in an increase in inventory pressure and excess production capacity of foreign milk powder. At the same time, domestic and foreign policy adjustments have also had an impact on milk families, such as: the EU eliminated milk production quota management, the State Council lowered milk powder tariffs.

It is worth noting that the "new label for prepackaged special dietary foods" was formally implemented in July. It requires that there be no Chinese label on imported infant formula milk powder product packaging, or if its Chinese label does not meet the relevant standards, it will be disqualified. Products are returned or destroyed. This has also prompted the foreign milk powder companies to urgently need to digest the inventory, repackaging, and price promotions are inevitable.

Reopen the market with e-commerce channels. In recent years, the prices of international milk sources have continued to fall. The National Development and Reform Commission has also conducted price antitrust investigations on several powdered milk companies such as Dumex, Wyeth, and Abbott. Under a variety of pressures, several foreign milk powder brands have issued price adjustment announcements. For example, Wyeth averaged a decline of 11%, the highest drop of 20%, Dumex main product price cuts of 5% to 20%, the United States Su Jiaer product price reduction of 5%.

Not long ago, Mead Johnson, a well-known foreign milk powder brand, became the first milk powder company to publicly downgrade its earnings forecast this year, reducing its sales growth range from 7% to 0%-2%. In order to stimulate the declining market conditions and respond to the impact of relevant policy adjustments, major ocean milk powder merchants began to change their strategies. The person in charge of the brand of milk powder said that in addition to the new imported products that stimulate the sales, the transformation strategy implemented in China will also continue to strengthen the e-commerce channel, and strive to achieve sustained sales growth in the Chinese market at the end of the year.