Comparison of the cooperation patterns and quality control of the dairy industry in China

Food safety has been a global issue in the recent years, and in particular dairy product have come to attention. Dairy products are associated with people’s standard of living and economic prosperity. In recent decades, a number of developing countries, such as China, India and countries in South East Asia, have increased their share in global dairy production and consumption. However, the stronger consumers demand for dairy product, has been followed by increased concern about the quality of dairy product. After a well-reported milk scandal 2008, the dairy industry in China faced enormous challenges. To regain both lost both profits and reputation. Since this crisis, the Chinese dairy industry has continued to work with food safety to rebuild their reputation and improve the quality of dairy product and service. In this thesis, the work of two leading dairy companies in China, the Mengniu Dairy Company Limited and the Yili Group is presented and compared. These two cases hold leading positions in the world dairy market, and have been competing for many years. The analysis explores and compares how these two dairy industries cooperated with dairy farmers to control the quality of raw milk quality. The supply of the raw milk is a key element in the end-chain dairy products and the dairy farmers play a significant role in dairy supply chain, so the cooperation between processing companies and farmers will affect the success of the whole chain.