14 Oct, 2008 - The Wahaha Group is considering a takeover of the dairy firm at the heart of the Chinese milk crisis, company sources have said.
A Hangzhou Wahaha Group spokesman confirmed the company, China’s largest beverage producer, is mulling the acquisition of Shijiazhuang Sanlu Group Co, which is currently 43% owned by New Zealand’s Fonterra.
Wahaha chairman Zong Qinghou was quoted as saying the purchase would help the company save on costs associated with the import of 150,000 tonne of milk powder annually.
“We could put Sanlu into operation again as soon as the purchase took place,” the Wahaha boss was reported as saying.
So far, the melamine-tainted milk scandal has sickened almost 100,000 people in the country and caused world-wide concern. Experts now believe the crisis will trigger a wave of dairy firm consolidations as consumers shun smaller brands and the Chinese Government encourages a decline in the overall number of companies to simplify monitoring of the sector.
Sanlu’s milk powder products were both the first to be contaminated with the industrial chemical and ones that contained the highest concentration of melamine. The company’s chairwoman was arrested by Chinese authorities shortly after the scandal broke.