French milk brand sets up in China to woo worried parents

PARIS - French milk brand Candia announced Monday it was setting up shop in China in a bid to ride on the wave of booming demand for foreign baby formula following a succession of food safety scares.

Chinese parents have become distrustful of domestic milk brands, particularly after a huge 2008 scandal involving formula tainted with melamine that killed six children and sickened 300,000 others.

Foreign brands have benefitted as parents choose to buy non-domestic products, driven by the belief they are of better quality.

Surfing on this demand, Candia said Monday it had opened its first shop on July 23 in the eastern city of Wenzhou. Ten other shops will open before the end of the year, centred around the eastern coast in the cities of Hangzhou and Ningbo.

"The choice (we made) of a specialised distribution system is essential in a country where consumers have a heightened need of reassurance on the origin of products, particularly for milk and baby formula," the brand said in a statement.

"The Candia brand offers Chinese customers a source of direct supply from France," said Giampaolo Schiratti, head of the brand.

Chinese demand for foreign baby formula is such that many parents and networks of traffickers have travelled far and wide to buy up stock, forcing some stores abroad to limit sales in the wake of shortages.

The announcement comes as foreign formula manufacturers already in China have come under government scrutiny in an apparent price-fixing investigation.

Several companies have since announced they will cut prices for milk in what has become the world's largest market for baby formula.