Chinese want to sell British milk at £3 per litre; British farmers produce some of the highest quality, but lowest priced, milk in the world

Chinese want to sell British milk at £3 per litre

State-owned companies are approaching UK farmers direct asking for millions of litres of milk, at a time when some farmers struggle to make a profit

British farmers produce some of the highest quality, but lowest priced, milk in the world. The best quality UK milk can sell for 90p per litre – in China, that same milk retails for 300p per litre. Photo: Alamy

By John Ficenec

10:00PM BST 13 Oct 2013

Chinese state-owned conglomerates are approaching British dairy farmers to secure millions of litres of UK milk, opening a potentially vast new market. Dairy Crest, the largest dairy company in the UK, has recently invested £40m in a new infant formula facility to access the China market – the world’s biggest consumer of milk. But the latest development has seen Chinese state-owned organisations trying to buy direct from UK dairy farmers.Martin Lovegrove, a former Citigroup banker, and now owner of a 250-strong herd of Holstein dairy cows, said he was speaking directly to a delegation from China that wants to buy between 30m and 50m litres of milk.

He has just had the website for his Henden Manor dairy translated into Chinese, with buyers expected to visit his farm soon.

“There is no question the way we are going you will see our milk being exported to China,” he said.

Euromonitor predicts that the Chinese market for infant formula will double over the next four years to $25bn (£15.5bn). The country bought 27pc more milk in the second quarter of 2013 than in the previous 12 months, according to a report by Rabobank.

China’s appetite for more diversified sources of supply has increased since the 2008 baby milk scandal. Sanlu, a company 43pc owned by the New Zealand dairy group Fonterra, recalled 10,000 tonnes of infant formula after it was found to be contaminated.

Earlier this year China bought 5pc of Ukraine’s farmland. Under the 50-year deal, 3m hectares (7.5m acres) will be used, with produce sold to Chinese state-owned conglomerates at preferential rates.

During the first five months of this year, Germany also exported 38,190 tonnes of dairy products to China, an increase of 138pc compared to the same period a year earlier. China is already Germany’s largest customer outside Europe for milk products.

Retailers in the UK also rationed sales of powdered baby milk earlier this year because of a surge in demand in China. Danone, the manufacturer of Aptamil and Cow & Gate baby-milk powder, said most supermarkets had introduced a restriction of two cans per customer.

Both the Government and the unions have identified fresh opportunities for UK farmers. “We are supportive of farmers exporting milk to foreign markets,” said a spokesman for the Department for Environment, Food and Rural Affairs. Earlier this year, the National Farmers’ Union’s chief dairy adviser, Rob Newbery, drew attention to export opportunities.

British farmers produce some of the highest quality, but lowest priced, milk in the world. The best quality UK milk can sell for 90p per litre – in China, that same milk retails for 300p per litre.

UK farmers protested as recently as last month that many struggle to pay bills and make any sort of profit from dairy farming.