By Xinhua writer Yang Jianxiang
BEIJING, Nov. 15 (Xinhua) -- China's dairy industry took an enormous blow
with the Sanlu tainted milk scandal, which led to the deaths of three babies,
the hospitalization of tens of thousands of others and an international scandal
that shamed China.
However, looking back over the wreckage of the affair, there is one dairy
producer which stands clear of the scandal, Sanyuan, and it is hoped that it can
show the way where Chinese enterprise and government at all levels has failed.
Test results announced publicly on Sept. 17 and 18 by the General
Administration of Quality Supervision, Inspection and Quarantine showed the
problem was bigger than expected. Many leading domestic brands were tarnished in
the scandal, but one firm's reputation remained intact. It was Beijing-based
"I learned of the test results from the media," said Wang Dan, a marketing
manager of Beijing Sanyuan Foods Company Limited. "I'm not surprised that our
products have stood the test."
The samples were drawn directly from stores. The second test focused on
liquid milk, with 53 batches from Sanyuan and 121 batches from Mengniu. "Mengniu
has a much bigger market share than us. The ratio is not in proportion. The
check on Sanyuan is stricter," Wang said.
She was surprised that so many domestic brands were involved in the
melamine scandal. As a marketing manager she realized the big opportunity which
lay ahead for Sanyuan.
Sales of Sanyuan milk soared after the announcement of test results. In the
evening of Sept. 21, a Xinhua reporter found in Wal-Mart at Xuanwumen, Beijing,
empty shelves where Sanyuan milk had been. Colorful fresh milk and yogurt
products from other brands packed the neighboring shelves. A saleswoman said
Sanyuan milk was sold out when she came to work at 1 p.m. The store had asked
for more, she added.
Similar accounts came from Carrefour, Merrymart and other supermarkets in
Beijing. According to the company, Sanyuan sales jumped threefold in Beijing,
mainly of liquid fresh milk. Panic buying was reported in some other cities and
provinces. Sanyuan milk was sold out for a while in Shanxi Province.
Prior to all this, Sanyuan matched output to sales. Now employees worked
extra hours. The capacity was exploited to the full. Machines ran 18to 20 hours
a day, with the remaining hours given over to maintenance.
Logistics were reinforced, too. Delivery in Beijing increased, in general,
from once to twice a day. For the above-mentioned big stores, the surge in
supply required four to five deliveries a day.
At a press conference held on Sept. 20, Sanyuan Foods general manager Niu
Liping promised stable prices for all its milk products. He also pledged to
boost production to secure supply, intensify quality checks, and pleaded with
consumers not to lose faith in domestic products.
The general manager looked not at all happy with the advantageous position
his company was placed in the wake of the melamine scandal. Instead, he
expressed a deep regret. "It's not easy for the country's milk industry to
develop in the current state. It's an outcome of generations of effort. Sanyuan
was deeply concerned about the damaging effect of the latest incident," he said.
Engaged in the milk business for more than 45 years, Sanyuan had market
strongholds in northern China region including Beijing and Tianjin
municipalities and Hebei, Henan, Shandong, Shanxi and Anhui provinces. The
company was cautious in enlarging its business. As a result it was losing ground
to aggressive later-comers such as Mengniu, Yili, and Sanlu. Sanyuan's market
share in Beijing dropped to below 40 percent last year from the 80percent of
about a decade ago.
Sanyuan Foods business division chief Ma Guowu said the current market
share in Beijing climbed to about 50 percent. "It could have jumped further, if
the company was not short of capacity," he said.
"Honest operation will be rewarded in the end," said Auntie Wang, a loyal Sanyuan milk consumer at Jingkelong Supermarket in Tianshuiyuan, Beijing.