Impacts of the Rapid Development of Supermarkets on China’s Diary Industry

Dinghuan Hu, Frank H. Fuller and Thomas Reardon

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: The emergence of supermarkets along with rapid development of the economy is quickly changing the traditional dairy industry in China. As supermarkets swiftly replace various traditional dairy product distribution channels, this change is promoting the formation of a national unified dairy product market. The development of supermarkets has created objectively favourable conditions for the movement of milk products from the low-cost production bases in the western pastoral provinces to the major consumption markets in the coastal region, and supermarkets have encouraged the consolidation of dairy firms into large-scale dairy-processing enterprises with centralized management. Along with the improvement of dairy product distribution, supermarkets have created opportunities for consumers in remote townships and rural areas to gain access to a greater variety of dairy products. The gradual increase in the number of rural children consuming dairy products may lead to tremendous growth in dairy product demand by the next generation. China, with a population of 1.3 billion, may one day become the largest consumer of dairy products in the world.

Keywords: China, dairy processing; dairy products; supply chain (search for similar items in EconPapers)
JEL-codes: O1 Q1 (search for similar items in EconPapers)
Date: 2006-05-09

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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:12609

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