Part article in today’s fin review. Looks ok for companies like Wattle. It is a US$20b anual market place after all. They also have the state enterprise to help them navigate the China market and decent deals are getting done.
The a2 Milk Company will extend its lucrative arrangement with a massive state-owned agricultural company to sell powdered infant formula into China in a deal that shows trade ties have remained strong despite the well-documented diplomatic differences between Canberra and Beijing.
The deal, which is being covered by an extensive Chinese media contingent, coincides with recent signs of a thawing of the diplomatic freeze that Australia has endured.
A signing ceremony will be held at Parliament House in Canberra on Tuesday for a2 and China State Farm representatives, attended by Trade Minister Steven Ciobo. China's ambassador to Australia, Cheng Jingye, has been invited to attend.
The agreement will renew China State Farm's exclusive import and distribution rights for a2 for another three years, with the option for a fourth.
a2 Milk chief executive Jayne Hrdlicka told The Australian Financial Review China State Farm had been an important partner for five years and the new deal cemented both organisations' ambitions to grow sales in China.
"They do a really nice job for us in navigating a gateway into the country and then access out to roughly 62 distributors that help us cover the physical retail market in China for our nutrition product," she said.
"As a state-owned enterprise they have quite a deep perspective on the regulatory framework, the importance of relationships throughout the regulatory system, and they are our eyes and ears in respect to managing a market that isn't our home market.
"Together we realise we have a product which resonates with the Chinese mums and their desire to ensure the best possible nutrition for their children."
Ms Hrdlicka was unable to disclose how much the new contract was worth, citing blackout restrictions before the release of a2's full-year results.
