Tag Archives: Nestle

CONSUMER: Chocolate Aims To Track China’s Coffee Boom

Bottom line: China’s chocolate market could follow the recent boom for coffee as a lifestyle product, benefiting foreign names like Nestle, Hershey and Dove that can tap the preference for premium brands.

Nestle, Hershey seek success in upscale chocolate

A couple of chocolate stories were in the headlines over the Lunar New Year holiday, spotlighting the big potential for the foreign treat to boom in a similar way that coffee has over the last few years. One story had Swiss giant Nestle (Zurich: NESN) saying it will look to chocolate and premium coffee to boost its stagnating China sales. The other had US chocolate giant Hershey (NYSE: HSY) also predicting strong growth for the China market, following its own recent local acquisition. Read Full Post…

News Digest: February 23-25

The following press releases and media reports about Chinese companies were carried on February 23-24. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Xiaomi Smartphone Sales Surge To Top Samsung (Seoul: 005930) As China’s No. 1 (English article)
  • LeTV (Shenzhen: 300104) Market Value Tops China’s Enterprise Board (Chinese article)
  • Nestle (Zurich: NESN) Adds High-End Snacks As Chinese Consumers Opt For Premium (English article)
  • Rainbow Medical Raises $25 Mln From China, Sets Up China Collaboration Office (Businesswire)
  • Huawei Changes Head Of Honor Brand Smartphone Division (Chinese article)
  • Latest calendar for Q4 earnings reports (Earnings calendar)

China Probes Drugs, Praises Milk Makers

China probes drug makers

China’s state planner has always been a potent force in making big investment decisions that affect the macro economy, and now it’s quickly emerging as a potent regulator of product pricing by the private sector. That’s my major conclusion following news for the second time this week that the National Development and Reform Commission (NDRC) is conducting yet another pricing investigation against foreign firms it suspects of fixing prices artificially high. Earlier this week the target of a new probe was foreign milk powder makers, and this time it’s foreign drug makers including Merck (NYSE: MRK), GlaxoSmithKline (London: GSK), Novartis (Switzerlan; NOVN) and around 2 dozen other companies. Read Full Post…

Foreign Milk Powder Makers Come Under Fire

Foreign dairy companies under investigation

A new price-fixing investigation looks suspiciously aimed at tarnishing the reputations of foreign milk powder makers like Danone (Paris: BN) and Nestle (Switzerland: NESN), demonstrating one of the many unusual challenges that such firms face when doing business in China. Such negative campaigns against foreign firms are relatively common, and often involve real issues such as product mislabeling or other minor transgressions. The fact that these issues often become big news in the Chinese media reflects a subtle tactic by Beijing, aimed at undermining the reputation of such firms in the eyes of Chinese consumers who often trust the foreign brands more than their domestic rivals. Read Full Post…

News Digest: July 3, 2013

The following press releases and media reports about Chinese companies were carried on July 3. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • China Investigates Danone, Nestle on Milk-Powder Pricing (English article)
  • Japanese Car Sales in China Decline for Fourth Quarter (English article)
  • Trina Solar (NYSE: TSL) To Redeem Outstanding Notes Due 2013 (PRNewswire)
  • Spreadtrum (Nasdaq: SPRD) Board Selects Advisor On Tsinghua Offer (PRNewswire)
  • Qihoo (NYSE: QIHU) a Winner in China Mobile Wars, Citigroup Says (English article)

Nestle Grows China Coffee Investment

Nestle promotes China coffee beans

Coffee lovers in China will be excited to hear about a major new initiative by Nestle (Zurich: NESN) to grow coffee beans in southwestern Yunnan province, in the latest challenge to the nation’s traditional tea-drinking culture. Nestle’s choice of the area known as Pu’er for its latest move is highly symbolic in the brewing battle between these 2 popular hot beverages, since that particular region is already famous in Chinese for its namesake tea leaves. Read Full Post…

News Digest: April 6-8, 2013

The following press releases and media reports about Chinese companies were carried on April 6-8. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Tencent (HKEx: 0700) Will Definitely Charge Fees For WeChat – MIIT Official (Chinese article)
  • Oil Spill Lawsuit Against ConocoPhillips (NYSE: COP) Finds Way To Texas Court (English article)
  •  Nestle (Switzerland: NESN) Brews Fresh Investment As World Savors Pu’er Coffee (English article)
  • 3 US Retailing Giants Enter China Using E-Commerce Channels (Chinese article)
  • China’s Trina Solar (NYSE: TSL) Eyes Return To Profit In H2 (English article)

News Digest: November 3 报摘: 2012年11月3日

The following press releases and media reports about Chinese companies were carried on November 3-5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Baidu (Nasdaq: BIDU) Acquires Providence Equity Partners’ Stake in iQiyi (PRNewswire)
  • Nestle (Switzerland: NESN): Pfizer (NYSE: PFE) Baby Food Deal Cleared By China (English article)
  • AutoTrader Buys 22 Pct of Chinese Car Site Bitauto (NYSE: BITA) For $58.5 Mln (English article)
  • LeTV (Shenzhen: 300104) Sues Youku Tudou (NYSE: YOKU) for IPR Infringement (English article)
  • ZTE (HKEx: 763) Sees Over 40 Percent Rise In 2013 Smartphone Shipments (English article)

Starbucks to the Rescue? 星巴克出手救助?

I’m sitting at my local Starbucks (Nasdaq: SBUX) having a morning coffee as I write this, so it seems only appropriate that I begin today with a look at this coffee juggernaut which is turning up its China PR campaign as it seeks to triple its size here over the next 3 years. This latest campaign comes at an interesting time, as other media are reporting separately that China’s coffee growers are coming under growing pressure due to a plunge in prices that have left many with big volumes of unsold coffee beans, a fact Starbucks would probably rather people didn’t know. But let’s look at the upbeat news first, which has Starbucks saying it will launch a virtual Starbucks China University and set up a modest fund totaling 1 million yuan, or about $160,000, to assist its local partners in their times of need. (company announcement) Starbucks puts most of its emphasis on the university initiative, saying it is part of its drive to become an employer of choice in China. It has plenty of reason for wanting to be a good employer, as it has recently embarked on a campaign that will see it sharply boost its China store count from around 570 at present to 1,500 stores by 2015, a number that would make the market its second largest after the United States. But as a cynical former journalist, I was more interested in the second part of the announcement, namely the part focused on the fund for helping its partners in need. Perhaps not coincidentally, Starbucks announcement comes just a day after the China Daily ran another coffee-related news item, though this one was decidedly more downbeat about suffering coffee growers in southwestern Yunnan province, China’s main coffee-growing region. (English article) The article notes that a 50 percent plunge in coffee prices over the last year has left many farmers in with beans they now can’t sell due to a global supply glut, and adds that one of the biggest buyers, food giant Nestle (Switzerland: NESN), has already completed its purchase plan for the entire year. Starbucks made headlines a couple of years ago when it announced a major initiative to promote coffee growing in China, and reiterated that commitment last July by announcing the formation of a joint venture to buy Chinese coffee beans for use both at home and abroad. (previous post) The China Daily article doesn’t mention Starbucks, but I suspect that if Nestle has already completed most of its buying for the year, then Starbucks has also probably done the same and may be quietly slowing or halting operations at this new joint venture, adding to the woes of local farmers. Of course none of this will really affect Starbucks China business, as a new class of Chinese yuppies in major cities have already shown they are quite willing to wait in long lines and pay big money for a chance to sip a latte with their friends at their local Starbucks. But the last thing this company needs as it embarks on its aggressive expansion is negative PR to tarnish its image, which is exactly what could happen if word emerges that it’s abandoning the coffee farmers it used in its previous PR campaign.

Bottom line: Starbucks’ latest PR campaign showing its commitment to China looks at least partly designed to divert attention from woes being suffered by Chinese coffee growers.

Related postings 相关文章:

Starbucks Wide Open for China Business with New JV 星巴克在云南建合资厂

Starbucks Goes Downmarket in China Drive 星巴克在华开拓低端市场

Starbucks Raises Prices, But Who Cares? 没人会在意星巴克提价

China OKs Nestle Buy, Opens Door for Big Brand M&A

Following its landmark decision last month to let KFC operator Yum Brands (NYSE: YUM) purchase Little Sheep (HKEx: 968), China’s largest hot pot chain, Beijing has once again approved another foreign acquisition of a domestic big brand, this time allowing Nestle (Switzerland: NESN) to buy candy maker Hsu Fu Chi (Singapore: HSFU), a move that should encourage more such M&A. (English article) China’s controversial 2009 decision to veto the purchase of leading domestic juice maker Huiyuan (HKEx: 1886) by Coca Cola (NYSE: KO) sent a chill through the cross-border M&A market for major Chinese brands, as many interpreted the move — theoretically made on anti-monopolistic concerns — as a nationalistic reaction by Beijing technocrats reluctant to see a promising domestic name swallowed up by a foreign multinational. The veto created so much concern that it took more than 2 years for another company, Yum, to try a similar acquisition, again testing Beijing’s commitment to free trade and openness to letting its healthy companies get acquired by foreigners. This rapid succession of approval for the acquisition of Little Sheep followed by Hsu Fu Chi, Nestle’s biggest purchase in China to date, seems to indicate that China will take a more balanced approach to foreign M&A of its healthy brands in the future, which could provide a nice lift for stocks in other listed big brands like Huiyuan that enjoy a strong reputation in China. Of course, China will now expect reciprocal treatment in the West, such as for Shanghai-based food maker Bright Food’s pending acquisition of Australia’s Manassen, announced in August. (previous post)  I don’t see any problems for this kind of cross-border M&A in popular consumer areas like food and restaurants, though the tech space may continue to be sensitive as evidenced by the derailment of Huawei’s planned purchase of a small US tech firm early this year. (previous post) All that said, this latest approval by China’s anti-monopoly regulator should breathe some healthy new life into cross border M&A in the consumer sector, bringing good news for both acquirers and acquisition targets both inside and outside China.

Bottom line: China’s approval of the sale of a leading candy maker to Nestle reaffirms its new commitment to allowing big consumer brands be purchased by Western firms, paving the way for more such acquisitions.

Related postings 相关文章:

Little Sheep Gets Swallowed: Good for Yum, Good for China M&A 小肥羊被收购对百胜和中国是双赢

Bright Finally Finds Tasty M&A in Australia’s Manassen 光明食品终於觅得“佳偶”

Huawei quits 3Leaf buy, but stay tuned for more

News Digest: December 8, 2011

The following press releases and media reports about Chinese companies were carried on December 8. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

Alibaba Wants to Buy Back Yahoo (Nasdaq: YHOO) Stake For $13 Bln – Source (Chinese article)

◙ China Approves Nestle’s (Switzerland: NESN) Candy Maker Purchase (English article)

Apple (Nasdaq: AAPL) Loses iPad Trademark Lawsuit in Shenzhen (English article)

◙ Buffett Makes a Big Bet on Solar (English article)

◙ China Factory Unrest Spreads Amid Economic Uncertainty (English article)