Milk-thirsty China overtakes Australia as New Zealand’s top export market

Sign of the times. During the first quarter of 2013, China overtook Australia as the country to which New Zealand sends the biggest share of its exports.

The reason? Milk.

In recent years, a number of scandals have erupted around China’s milk supply, undermining confidence among consumers. In 2009, two Chinese men were executed for selling tainted milk in the aftermath of a scandal that sickened some 300,000 children. Six infants died.

Since then China’s demand for high-quality milk has had repercussions for markets around the world. A profitable black market has been built around bulk buyers of Australian infant formula, for example. And Chinese visitors to Australia hit a record last year, in part to stock up. In the UK, stores are rationing the stuff. Chinese companies have been investing abroad—such as in France’s Brittany region—in an effort to capture the higher profit margins on foreign milk. Likewise, Chinese producers are eager to boost investment in New Zealand, which has brought on a national debate about foreign landownership in the island nation.

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