Nestlé has acquired a 60 percent stake in Chinese food company Yinlu Foods Group for an undisclosed sum. Yinlu Chairman Chen Qingyuan will continue as the top executive under the new ownership arrangement, termed a “partnership” by Nestlé. The acquisition must be approved by Chinese regulators before it is finalized. A well-established household brand in China, Yinlu markets ready-to-drink peanut milk and canned rice porridge, and is a co-manufacturer of ready-to-drink Nescafé coffee in China. Yinlu’s 2010 sales were CHF 750 million (US$843 million). Nestlé has operated in China for more than twenty years, with 23 factories, two R&D centers and 14,000 employees.
"Nestlé to enter partnership with Chinese food company Yinlu", Press release, Nestlé, April 18, 2011
Ongoing government inspections of China’s 800 fresh milk and infant formula producers could lead to the revocation of production licenses of 20 percent of the companies because of inadequate product testing equipment. So far, dairies in Fujian, Guangdong, Shaanxi, Sichuan and Ningxia have been inspected. At least 30 percent of the dairies in four of those provinces are likely to have their production licenses revoked, but fewer than 20 percent of those in Sichuan province. The inspections were expected to be completed by the end of March. The government requires that testing equipment must be able to analyze for 64 additives, including melamine. But upgrading equipment is prohibitively expensive for all but the largest producers, industry analysts say.
"Dairy products crackdown", China Daily, March 28, 2011
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China Knowledge Newswires, April 21, 2011
The Financial Times, April 04, 2011
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