China's mouldy cheese ban leaves lingering stink
23/10/2017 10:10
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Katrina Hamlin
HONG KONG, Oct 23 (Reuters Breakingviews) - A Chinese ban on
mouldy cheese has ended, but the stench lingers. Such fears can
be expected in a maturing market trying to improve its
reputation on food safety. Paranoia, however, will sometimes be
hard to digest.
Over the summer, Chinese customs officials grew worried
about Brie, Roquefort and the like and blocked imports. Domestic
consumers are increasingly sensitive about avoiding harmful
fare. More than 70 percent worry that what they eat could damage
their health, according to a McKinsey report last year. That's
up from 60 percent in 2012.
The Chinese market is nevertheless an appetizing one. Cheese
sales are expected to grow by 25 percent this year, according to
research outfit Euromonitor, which expects the country to become
the world's largest dairy market by 2022. The penchant for more
and different cuisine combined with wariness about protections
presents two problems for those seeking to capitalize on
changing tastes.
First, regulators will respond to concerns with severe and
sudden clampdowns. In this instance, a complaint over bacteria
used in soft cheeses primarily from France and Italy triggered
the abrupt freeze. It wasn't an isolated case, either. After
China's unexpected withdrawal of a factory licence from
Bellamy's Australia BAL.AX , the dairy supplier's share price
took a hit.
Second, shoppers are equally quick to shun suspect goods.
Imports are generally considered safer than home-grown vittles.
Even so, a foreign brand offers little or no protection when
things go wrong. A scare over dodgy chicken at KFC 3420.T , for
example, led to Yum's YUMC.N same-store sales in China
tumbling by a third in January 2013.
In the long run, these sorts of shocks can have a helpful
effect. Notably, China's infamous milk contamination crisis in
2008 led to more comprehensive food-protection laws. Similarly,
European diplomats say the cheese meltdown has started a
conversation on how best to improve relevant standards.
Withstanding the unsettling turns, though, will require
investors to have a strong stomach.
On Twitter https://twitter.com/KatrinaHamlin
CONTEXT NEWS
- China has lifted a ban on imports of mould-ripened cheeses
such as Brie, Camembert and Roquefort, the Financial Times
reported on Oct. 23.
- Shanghai, one of the main entry ports for most products,
had halted the import of such cheeses, Reuters reported in
September.
- For previous columns by the author, Reuters customers can
click on HAMLIN/
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Reuters: Shanghai's hard line on soft cheese could hurt European
companies urn:newsml:reuters.com:*:nL4N1LP3PQ
FT article https://www.ft.com/content/28b90280-b70f-11e7-8c12-5661783e5589
BREAKINGVIEWS - China setbacks spoil Australia's dairy strategy
urn:newsml:reuters.com:*:nL4N1LH3XN
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(Editing by Jeffrey Goldfarb and Bob Cervi)
((katrina.hamlin@thomsonreuters.com; Reuters Messaging:
katrina.hamlin.thomsonreuters.com@reuters.net))
Keywords: CHINA DAIRY/BREAKINGVIEWS