Dairy producer Yili's competition with peer Mengniu goes upscale

Shanghai

INNER Mongolia Yili Industrial Group Co's competition with China Mengniu Dairy Co in the US$52 billion Chinese dairy market is going upscale, centring on a premium, organic segment that makes up just one per cent of the country's milk consumption.

Yili is paying 4.6 billion yuan (S$945 million) for 37 per cent of China Shengmu Organic Milk Ltd. The Hohhot, China-based company could lift its stake further, giving Yili majority control of the largest Chinese organic milk producer and the only one in the country certified to meet European standards.