Citi are pond scum and Teeger is a tosser.
Printable View
tomm, I returned from a business trip to China (primary produce focus) and after observing how things are changing over there, I think the world, but especially NZ which is ultra-dependent on China trade, are making a very grave mistake if they think that the mistrust of China food and products is going to last forever.
For sure, the Chinese population are still gripped by the many appalling scandals associated with food integrity (or lack there of).
And one does not have to go far, just the local fruit shop, to see how perfect each fruit produced in China is - free from any blemish - to know that there's still abundant use of all kinds of chemicals (insecticide, fungicide). And so I steer clear of consuming any local China fruit - likewise, the Chinese who can afford to.
But the government there is definitely cracking down on food safety violations - starting with the imposition of very strict standards, the ramp up of supervision, the imposition of very severe penalties and requirement to account at a local level for any violations. The many businessmen who I talked to are all very aware of and operate to conform to the strict regime.
As all will be aware, violations there are treated as criminal acts and the criminals are subject to very harsh penalties - including the death penalty.
In time, say 3 to 5 years, when food safety issues are no longer at the forefront of basic consideration in China, the competitive edge enjoyed by foreign goods and food could become a thing of the past.
Make hay while the sun shines and ATM under Jayne is definitely doing the right thing to build on and maintain its leading market position - sacrifice short term margins for long term market entrenchment.
Short term, ATM sp is sure to be volatile and unlikely, imo, to go gangbuster again until ATM demonstrates it is growing profits via higher revenues at lower margins. That could be 2 years away. Xero is a good case in point.
PS. The Chinese flock to every new store opening to grab the opening specials and in the case of Costco, because things are cheaper there than in other equivalent stores. Watch when they open in Auckland - it will be the same. Go to Melbourne and observe the same as in China.
Your point of view is great, as we and other countries do import their machinery for manufacturings. They are intelligent to do so and copy, there was a time that the Western actually let them do it because the cost would be too high and can't afford to manufacturing machines themselves. But then come a time that Chinese took over the Western in manufacturing high goods. Then come the time the Western introduce Digital advance high intelligent.
Still, the Chinese are intelligent enought to skip the quality, for example a concrete post suppose to have such a mount of steel to stand for 100 years and stand for disaster at lever 8, they says : well... we don't need that much steel as long as it can last 100 years and about the disaster , it won't come why bother and if it does come ,then who knows what make the bridge collapsed... and when the time comes they are already retired. ( got away with ,millions millions of dollars)
About the dairy foods, believe me the food you see there with high price for the elite.. the apple look shining and clean and a beautiful red colour and very fresh. You have no ideas how the apple can keep looking like that for so long..
I do have families and friends whom doing this business which made me swear to myself that I will never buy any foods from China. ( although the export ones do have higher quality). The News and televisions are suppressed to those news. and no one do anything about it.
P/S although foods products come out is with the way it is intended but it is totally changed in quality once in consumers hands.
Chinese mums want the best sitting on their table when their relatives and friends come to visit, it's all about prestige and giving their little darlings the best plus the show off factor to boot, they dont want a second grade product or a product with a history of contamination linked to it sitting on their table.
This link to a post on the HC forum by Wicked Sushi sums up A2's position in China v well.
Not just food safety violations why ASF keeps spreading?
https://www.dw.com/en/swine-fever-sc...die/a-51062018
Junlebao is not some mickey mouse China company - it is rapidly becoming the main domestic supplier of trusted IF in China.
http://www.chinadaily.com.cn/a/20190...2260baf24.html
Excerpt : "Last year, Junlebao sold more than 52 million cans of infant formula, which weighed 46,000 metric tons and were supplied to more than 2 million babies.
"The target for this year is to reach 75 million cans and to rank first by sales volume in the country," Wei said.
The market share of domestic formula in China increased to more than 60 percent in 2018, compared with less than 40 percent before Junlebao rolled out its formula products, according to statistics provided by the company."
I think you have missed the point completely, tomm.
The point being that some of you are too quick to dismiss and downplay China domestic IF players out of contention (because of the food integrity issues).
They are already getting their act together, gaining market acceptance and market share - with the full support and resources of the China government at central and state levels.
And they will definitely, imo, impact upon the A2 milk market in the years to come because they are now entering that premium market.
I believe ATM (under Jayne) is doing the right thing in recognizing the domestic competitive threat - hence the increased marketing and promotion spend.
Seriously, some of you need to research how the domestic China players are doing instead of myopically hoping that China players will never regain the confidence of China consumers.
I guess I should have sold all my ATM shares when they came out with the first profit downgrade in the full year's results but it has been such a wonderful story, it's hard to be objective at times.