Business Idea: Baby Milk from Ireland to China

pauldla

Hi guys,

I'm looking into buying baby milk from home to sell here in China (for which there is a huge demand). There are a lot of details that would need to be worked out, but I'm sure it's well worth looking into. Biggest problem I can see at the moment is finding a supplier in Ireland, hence my post. Can anybody offer any advice or suggestions, please?

Cheers

Paul

Topper7

pauldla wrote: »

Hi guys,

I'm looking into buying baby milk from home to sell here in China (for which there is a huge demand). There are a lot of details that would need to be worked out, but I'm sure it's well worth looking into. Biggest problem I can see at the moment is finding a supplier in Ireland, hence my post. Can anybody offer any advice or suggestions, please?

Cheers

Paul

As far as I'm aware, most dairy processing plants operate b2b. You could try googling & emailing different companies commercial team to see what they could offer. It would have to be worthwhile for the dairy processor also. The company I'm familiar with you would need to be looking at ordering a container load weekly. I'm aware off 2 large companies in Ireland all ready exporting to China

pedronomix

Google Irish dairy Board and Enterprise Ireland China... they have all the info you need!

MammaZita

Are you talking about artificial milk or breast milk? I know there's a massive demand for the latter in China.

lucky john

Off topic a bit but I saw a bbc programme last year about Chinese students in the UK putting themselves through college there by buying baby formula in Tesco and selling it on the Chinese version of ebay. Obviously a huge mark up available.

DubTony

Assuming you're talking about infant formula, as opposed to some sort of liquid, Ireland already produces 15 to 20 % of the worlds formula. Danone is the biggest player (Aptamil and Cow & Gate) and they are also the market leader in China.
Another big player with a presence here is Mead Johnson (I'm not sure what production facilities they have here) which produces Enfamil and is currently rapidly expanding its business in China.
I believe Tipperary CO-OP is also a big producer of the base formula which is then sold on to others internationally to complete.

China recently closed over 100 local producers of formula amid safety concerns, so while it's a big market, it looks like the big players are firmly in control.

Cianos

This is the reason supermarkets only allow 4 cartons per person to be sold. I doubt there's any way to turn this in to a business if you're just starting out in the area.

Anyone doing the "organic" thing with baby formula yet? This could be an angle!

pauldla

Thanks for the replies, folks.

Yeah, there is a huge demand for it here at the moment. I’ve seen queues of people at some of the border crossings in SZ all carrying baby formula purchased in Hong Kong, so much so that Hong Kongers have been complaining that they’ve virtually emptied the city of its entire stock (adding to the ‘Locusts’ epithet they like to give Mainlanders). From what I’ve seen on the shelves, in this part of the world most originates from New Zealand, but that’s changed of late due to something of a tit-for-tat with the Chinese that’s been going on since the melamine scandal a few years back (the story broke in NZ, if memory serves; big loss of face). They have, as DubTony points out, raised concerns with a few UK suppliers and stopped doing business with them (including one cheese manufacturer that wasn’t actually supplying to the Chinese market).

Luckyjohn, they sell the milk on taobao (the Chinese Ebay), posting photos of the receipts to prove it’s the real deal etc. I’ve read of some students (and not just students) spending their weekends driving from supermarket to supermarket buying up their allotted 4 tubs and then sending them back home. That’s not quite what I have in mind, but it does point to another issue (the huge cost of shipping baby formula).
Arranging things this end shouldn’t be a problem, it’s finding a supplier at home who can ship quantities at a price that can turn a profit for a small operator that is the problem. DubTony may well have a point, and the big boys have it all sown up, but I still reckon it’s worth looking in to.

Thanks again for your replies, ladies and gents, I appreciate it!

RUDOLF289

pauldla wrote: »

Thanks for the replies, folks.

Yeah, there is a huge demand for it here at the moment. I’ve seen queues of people at some of the border crossings in SZ all carrying baby formula purchased in Hong Kong, so much so that Hong Kongers have been complaining that they’ve virtually emptied the city of its entire stock (adding to the ‘Locusts’ epithet they like to give Mainlanders). From what I’ve seen on the shelves, in this part of the world most originates from New Zealand, but that’s changed of late due to something of a tit-for-tat with the Chinese that’s been going on since the melamine scandal a few years back (the story broke in NZ, if memory serves; big loss of face). They have, as DubTony points out, raised concerns with a few UK suppliers and stopped doing business with them (including one cheese manufacturer that wasn’t actually supplying to the Chinese market).

Luckyjohn, they sell the milk on taobao (the Chinese Ebay), posting photos of the receipts to prove it’s the real deal etc. I’ve read of some students (and not just students) spending their weekends driving from supermarket to supermarket buying up their allotted 4 tubs and then sending them back home. That’s not quite what I have in mind, but it does point to another issue (the huge cost of shipping baby formula).
Arranging things this end shouldn’t be a problem, it’s finding a supplier at home who can ship quantities at a price that can turn a profit for a small operator that is the problem. DubTony may well have a point, and the big boys have it all sown up, but I still reckon it’s worth looking in to.

Thanks again for your replies, ladies and gents, I appreciate it!

I have had a look at this in the last 6 months for a trader. The challenge is to find a continuous source of supply.

For instance, in Holland the shops ran empty because

a) the creameries / formula manufacturers were exporting a significant part of
their products to china
b) a lot of people bought large quantities of milk powder in supermarkets and
any other shop that sold it

To the extend that sales of milk powder are now very restricted in Holland.

I have spoken to the Irish Dairy Board and to a number of suppliers. Nobody is interested in going outside their channels of distribution in China. They can supply as much as they want already.

I also know that New Zealand is struggling to keep up with demand, despite the fact that Frontera (the largest diary supplier in NZ) was involved in a quality problem that made the press all over the world.

Essentially it is a closed shop. I don't see a way around it.

Regards,
Rudolf289

pedroeibar1

pauldla wrote: »

Hi guys,

I'm looking into buying baby milk from home to sell here in China (for which there is a huge demand). There are a lot of details that would need to be worked out, but I'm sure it's well worth looking into. Biggest problem I can see at the moment is finding a supplier in Ireland, hence my post. Can anybody offer any advice or suggestions, please?

Cheers

Paul

That's a nightmare sector. The melamine scandals in China / with Chinese product are still being discovered, despite a couple of people being executed for the big one back in 2008(?) Similar 'tamperings' with other products continue to happen.

Why would any multinational deal with a small guy in China? What would be the point? Firms like for example Wyeth have been exporting powdered milk for decades, they have the right links, reputation, people connections, size, brand recognition, distribution networks, etc.

Even for big companies China can be a nightmare, with JV partners ripping off the business, managers 'sourcing' product locally, relabeling, departing from agreed specs, adulterating product to gain a higher margin, etc. As a small guy on the right side of the law but up against the wrong people I would not fancy survival chances. And the whistleblower on the original melamine scandal was murdered just a couple of years ago.

pedroeibar1

Cross-post Rudolf.

househero

Allow me to put an end to this ridiculous speculation that you can buy 'baby formula' at retail levels and make a profit by importing it to China.


China sources its baby formula from Fontana, the worlds biggest producer.

Glanbia is Ireland's biggest baby formula ingredient supplier, but most of its operations are based in New Mexico as our milk (which is processed in to baby formula) is expensive by comparison.

The Chinese were here not very long ago to measure up the potential of Ireland supplying significant quantities direct. (You don't have enough money to deal with these quantities) but Fontana were here the year earlier hammering out deals with smaller suppliers (Wexford Creamory and Cardbury) I don't know the outcome of these negotiations, they will be apparent in the market when the EU milk quotas end.

What you are attempting to move in to, is a significant scaled business. You need licenses to legally operate.

You don't have a chance.

househero

Another point to make is unlicensed traders and poorly regulated markets (such as the UK) is exactly the reason why Fontana had no idea where the contaminated (whey) baby formula ended up.

It is illegal to import/export dairy products without a license. So you might find stories of individuals illegally exporting baby formula, a business would be shut down and its owners sued for negligence very quickly.

Danone only packages and markets baby formula, it doesnt manufacture it in the way that the average man would understand. Glanbia are running very very close to capacity and has plans for expansion/closer cooperation with Fontana.

But to give you an idea of bulk raw cost prices, you can (if you are part of the right channels) obtain baby formula around $3 USD per kg on a quarter of a million kilo contracted basis...

Do you have that kind of money?

GerardKeating

Cianos wrote: »

This is the reason supermarkets only allow 4 cartons per person to be sold. I doubt there's any way to turn this in to a business if you're just starting out in the area.

I was in a local supermarket recently, (they have a two carton limit per customer) and a nice staff person explained that this was because people were buying in bulk to send it to china and they had "to save it for our own"... but If i wanted I could buy as many as I wanted.

merlin2012

pauldla wrote: »

Hi guys,

I'm looking into buying baby milk from home to sell here in China (for which there is a huge demand). There are a lot of details that would need to be worked out, but I'm sure it's well worth looking into. Biggest problem I can see at the moment is finding a supplier in Ireland, hence my post. Can anybody offer any advice or suggestions, please?

Cheers

Paul

hi, i m very interested in your idea of exporting baby milk powder from china to china, how about it now? i m chinese and very interested in cooperation with you , if you are still here , please contact with me.

merlin2012

GerardKeating wrote: »

I was in a local supermarket recently, (they have a two carton limit per customer) and a nice staff person explained that this was because people were buying in bulk to send it to china and they had "to save it for our own"... but If i wanted I could buy as many as I wanted.

hi, i m chinese and very interested in cooperation with you , if you are still here , please contact with me, i m in dublin now

RUDOLF289

merlin2012 wrote: »

hi, i m chinese and very interested in cooperation with you , if you are still here , please contact with me, i m in dublin now

Hello Merlin2012,

I really don't think that it is possible to export baby milk formula on a large scale from Ireland. The large co-op's are all connected to the Irish Dairy Board who have their own distribution channels in China as do the multinationals like Wyeth.

If you need significant (container) quantities, you probably are best of to search out commodity traders.

Have a look at the following link ; https://www.linkedin.com/groupItem?view=&gid=4770678&type=member&item=198174766&commentID=5979290388727422976&trk=groups_most_popular-0-b-cmn&goback=%2Egmp_4770678#commentID_5979290388727422976

There may be something of interest there.

Cheers,
Rudolf289

merlin2012

RUDOLF289 wrote: »

Hello Merlin2012,

I really don't think that it is possible to export baby milk formula on a large scale from Ireland. The large co-op's are all connected to the Irish Dairy Board who have their own distribution channels in China as do the multinationals like Wyeth.

If you need significant (container) quantities, you probably are best of to search out commodity traders.

Have a look at the following link ;

There may be something of interest there.

Cheers,
Rudolf289

Hi Rudolf289, thanks your help.

if i can find a distributor in ireland, how can i know if it is a really distributor, what kind of documents from him that i should check and verify? i must make sure i can buy the really, not sham, baby milk powder.

Thanks again.

RUDOLF289

merlin2012 wrote: »

Hi Rudolf289, thanks your help.

if i can find a distributor in ireland, how can i know if it is a really distributor, what kind of documents from him that i should check and verify? i must make sure i can buy the really, not sham, baby milk powder.

Thanks again.

Hello Merlin2012,

I am not sure about the certification process that you would need to apply. I am just a simple freight forwarder ........ You probably would need to know what the certification process is in China and discuss the requirements with potential suppliers.

I do know that Ireland and Irish producers of food products, especially those that are connected to the dairy industry, are very protective of their reputation.

My perception is that, whilst there is a tremenduous demand for infant food products in China, it is a very challenging market to be involved in. Never mind the captital required to be able to trade.

Best of luck with your venture.

Cheers,
Rudolf289

pauldla

I looked into it, Merlin, and the markup was small to the point where, well, there was no point considering it.

You could try selling directly to your customers via taobao; many do.

daRobot

Unless you're successfully running businesses with 8 figure + turnovers, this is not a venture to be given any consideration.

devildriver

Well somebody is doing it!

http://www.emeraldgreenbaby.com/

delahuntv

devildriver wrote: »

Well somebody is doing it!

http://www.emeraldgreenbaby.com/

With a disclaimer


"When ordering from outside the EU, please make sure that you are able to meet all the requirements for importing the product you have ordered. For some countries there will be additional taxes and/or import duties/fees charged by your local authorities.

Please check the regulations and charges in your country before ordering. We can not take any responsibility for your local regulations and also can not help in case the shipment is stopped or returned for that reasons."

RUDOLF289

delahuntv wrote: »

With a disclaimer


"When ordering from outside the EU, please make sure that you are able to meet all the requirements for importing the product you have ordered. For some countries there will be additional taxes and/or import duties/fees charged by your local authorities.

Please check the regulations and charges in your country before ordering. We can not take any responsibility for your local regulations and also can not help in case the shipment is stopped or returned for that reasons."

That's why a lot of milkpowder is sent to Hong Kong. I know people who have buildt up a business doing the rounds at supermarkets, buying the maximum allocations (litterally around the country through a network of friends, family, acquintances etc) and then send it to Hong Kong.

From there it is either sold in Hong Kong shops to "mainlanders" or taken across the border using any means possible. I recently read that the Government in China is restricting the amount of times mainlanders can cross into Hong Kong.

There is a margin to be made from it but it is a lot of hard work. Never mind the potential risks.

Cheers,
Rudolf289

pauldla

RUDOLF289 wrote: »

That's why a lot of milkpowder is sent to Hong Kong. I know people who have buildt up a business doing the rounds at supermarkets, buying the maximum allocations (litterally around the country through a network of friends, family, acquintances etc) and then send it to Hong Kong.

From there it is either sold in Hong Kong shops to "mainlanders" or taken across the border using any means possible. I recently read that the Government in China is restricting the amount of times mainlanders can cross into Hong Kong.

There is a margin to be made from it but it is a lot of hard work. Never mind the potential risks.

Cheers,
Rudolf289

Yeah, there is now a limit of one crossing per week, depending (AFAIK) on your travel documents.