Next time you drink a glass of cheap milk, think about the consequences.
Next time you drink a glass of cheap milk, think about the consequences.

Owning distribution channels pays off for NZ Milk exporter

A DECISION to set up its own Chinese distribution network is paying dividends for a New Zealand infant formula exporter in the wake of Fonterra's botulism botch-up.

Auckland-based Biopure Health has established 10 stores (with 90 more planned) of New Zealand Milk Bar retail shops in China's southwestern Sichuan province, selling its Infapure baby milk brand.

Managing director Simon Page said Biopure had benefited from having its own retail stores and the face-to-face contact with customers.

"Throughout the recent (botulism) crisis, customers were coming into the stores for reassurance and our staff were able to give them that as news unfolded," he said.

Page said sales halved in August after Fonterra announced 38 tonnes of whey protein - used by several customers to make products including infant formula sold in China - might have been contaminated with a botulism-causing bacterium.

But by September sales had recovered to 75 per cent of normal and October was a record month.

While "the gloss" had gone off this country's reputation for safe food in China, demand for high-quality dairy products was stronger than ever.

"Our customers across China tell us that NZ milk has lost its aura of perfection after widespread news of Fonterra's product recall, but they still trust the quality and safety of NZ-made products."

Other small-scale infant formula exporters have complained of having their sales virtually wiped out by the botulism scare, which turned out to be a false alarm.

Biopure has an agreement to sell its brand in the Chengdu branch of Ito Yokado, a high-end Japanese department store chain. Infapure is also one of a small number of brands to be stocked in a 70-store chain of pharmacies in China's Zhejiang province, part of a Government push to use pharmaceutical channels as a way to monitor baby milk sales.