Fonterra challenged in China’s fast-growing milk powder market

SHANGHAI/WELLINGTON (Reuters) – Milk powder buyers in China are starting to cut their reliance on New Zealand’s Fonterra (FSF.NZ), opening the way for U.S. and European firms to break the dairy giant’s grip on an infant milk formula market set to double to $25 billion by 2017. Chinese drinks maker Want Want has said it plans to reduce imports to diversify its supply chain, and at least two multinational infant formula sellers have either cut supply from Fonterra or plan to diversify supply for the China market, people in the industry told Reuters. A drought in New Zealand earlier this year curbed milk powder production, highlighting the risk of over-reliance on one supplier.

    

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