Note that the new rules announced (or rather confirmed) by China are aimed at reducing the number of brands sold across the country by limiting registered factories in China and offshore to producing three brands and nine different products each.
"There are currently around 2000 brands sold in the [Chinese] market, among which 70 per cent to 80 per cent will be eliminated under the registration system," said a consumer analyst at UBS, Christine Peng.
"We believe small players with no proper manufacturing capability ... could be negatively impacted, pointing to consolidation benefits for larger players."
I hope this may help ATM find spare manufacturing capacity in NZ when it becomes active here next year. It will presumably be looking for production plant that can process A2 milk into packaged liquid milk for export, long-life milk, WMP and possibly infant formula to supplement what Synlait is turning out at present.
At present NZ is exporting many small brands of powder manufactured under contract and this is keeping facilities such as expensive dryer plants pretty preocccupied. The Chinese move looks like putting the kibosh on a lot of them, possibly creating a surplus of processing facilities..
A2M Price at posting:
$1.43 Sentiment: Hold Disclosure: Held
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