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Bright Dairy must rebuild reputation after three incidents in May

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: Food and agriculture organization, Agriculture

Having been singled out three times in May alone by China’s food inspectors, Bright Dairy risks significant harm to its corporate image as consumers continue to doubt the safety and quality of dairy products made domestically, market analysts warn.

According to CCM​, the state-owned major needs to make a breakthrough in customer assurance by strengthening its management and cementing its brand image. 

Yet the negative comments by the China Food and Drug Administration come as Bright has been gradually dropping out of the top echelon of China’s dairy industry and is stuck in a development bottleneck, the market intelligence firm believes. 

On May 10, the CFDA issued the results of a sample test on dairy products, in which the plain yogurt produced by Bright Dairy in Jingyang was found to have excessive colonies of the coli group of bacteria.

Ten days later, the regulator singled out a fermented reconstituted milk of red dates made by Bright Dairy’s Wuhan factory, which it said was labelled inappropriately. 

Then, on May 24, inspectors in Shaanxi province released a report on dairy products based on spot testing. In it were listed 15 instances of substandard practices by Bright Dairy in Jingyang, including maintaining lax production records, poor storeroom management and substandard quality control.

Overall, Bright has not been performing well on the market this year, with competitors Yili and Mengniu—completing China’s big three dairy companies—gaining position, largely due to a lack of product and manufacturing development.

According to its annual report last year, Bright’s operating income was down by more than 6% over the previous year at just under US$3bn, while Yili and Mengniu performed considerably better.

[Bright] is paying for the price of transformation and adjustment due to its extension of branches in other places besides Eastern China—its base camp—in recent years, the high turnover rate of top management personnel, and of negligence in management​,” said Chen Wen, a marketing specialist in food and beverage.

Under Bright’s business model, the company aims to expand with factories in all major provinces and cities in China while strengthening its management and quality control processes across the country—ambitions which CCM believes are essential if it wants to build its brand image and break through its development bottleneck.

Yet its shortcomings in May highlight how it has been failing in areas other than expansion, says Chen. 

Such kind of troubles occurred in a succession at the branch offices in other cities, which revealed the management problem of Bright Dairy during its fast expansion; so it’s necessary for them to strengthen and detail the management rules,​” Chen said.

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CFDA rapped for loopholes and politically incorrect practices

China’s anti-corruption agency has published a report that highlights a raft of alleged failings by China’s food and pharmaceuticals regulator identifies widespread loopholes and derelictions of duty in its practices.

CFDA

Having sent inspectors to assess the China Food and Drug Administration last year, the Central Commission for Discipline Inspection also called on the regulator to standardise its approval and inspection processes.

The top-ranking internal-control unit of the Communist Party of China revealed its findings publicly, but offered few examples of the failings it had encountered during its assessment.

Instead, the agency provided a vague list of criticisms of the regulator and its leaders, including its limited capacity to work effectively. Its report also singled out a lack of clarity in the responsibilities of officials alongside an excess of discretion allowed to enforcement officers in cases.

Moreover, the CCDI, which has become an increasingly powerful force since President Xi Jinping became head of the Communist Party and began to implement fierce anti-corruption measures, criticised the CFDA’s adoption of thought and work protocols advocated by the Communist Party.

The inspectors accused the CFDA of not paying sufficient attention to “party building​,” a term CCDI and the government use to describe activities designed to bolster the Communist Party. 

They also pointed out flaws in how the CFDA had been hiring and educating its officials, which the CCDI viewed as enabling unsuitable people to obtain and retain positions within the organisation.

Food and drug officials have since pledge to resolve its issues and adhere to anti-corruption rules.

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Ancient Chinese agricultural systems will benefit poor rural areas in countries as far afield as in Africa and Latin America after officials in Beijing agreed to intensify their partnership with the Food and Agriculture Organisation of the United Nations.

Food security

The new memorandum of understanding will broaden the scope of China’s role in worldwide rural development after decades of collaboration with the FAO.

According to the FAO’s director general, China has been one of the biggest contributors to FAO food security programmes, both in financial terms and by sharing its own experience, knowledge and technology with other countries. 

"China has much to offer to all developing countries in the world in terms of agriculture and food security​," Graziano da Silva said, citing an ancient farming system whereby farmers in Zhejiang Province still combine rice farming with aquaculture, and literally grow fish in flooded paddy fields. 

While the rice paddies offer protection and organic food for the fish, the fish in turn soften the soil, provide nutrients and oxygen for the rice and consume insects and weeds that are harmful to the rice. 

The rice-fish system has been in existence for 1,000 years and was designated a Globally Important Agricultural Heritage System (GIAHS) by the FAO. 

"China's experience with GIAHS is remarkable and could be a source of inspiration to many countries​," said Graziano da Silva.

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