Bellamys in China Trouble, page-17

Here are some of my thoughts for BAL.

1. Delay of CFDA approval is due to government re-org beauracracy, but nothing to do with China-Australia tension. Only 1 batch of approvals has been announced in the past 4 months, while between Oct and Dec 2017 they granted 19 batches. Many other manufacturers along with BAL are on the same boat waiting approval. Chinese government holding Aussie wines? Yes and why not, it doesnt hurt anyway as most Chinese don't care about wines. Their favourite liquor company is almost 1.5 times bigger than Commonwealth Bank in market cap. Deliberately holding Aussie IF? Probably not for as it's a high demand market.

2. BAL will get CFDA eventually. The problem is timeline. New CFDA rejected a French supplier Lactalis's application this May due to Salmonella scandal. Other than that, no rejection has ever been issued. I have trouble imagining how BAL will be rejected. They can't say BAL is rejected because of diplomatic tensions.

3. Impact. The delay of CFDA approval will certainly hurt time-to-market strategy for BAL China labal IF, and would probably affect company's financial projection in the short to mid term. This issue is real. What's worse is late arrival in the market would potentially hurt BAL's growth momentum they have been building since early 2017.
Other brands who had early access to market will focus on penetrating and consolidating the market before BAL gets the ticket.