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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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