China’s Dairy Probe Could Squeeze EU Exporters, Analysts Say

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Cheese products on sale at a Shanghai supermarket in November 2022. Photo: VCG

China’s latest move to probe European Union dairy imports won’t have much of an impact on the already oversupplied domestic market, but rather on the bloc, which could face challenges in finding export alternatives, Chinese industry analysts said.

On Wednesday, the Ministry of Commerce launched the anti-subsidy investigation that will cover dairy products including fresh and processed cheese, the latest development in a tit-for-tat trade dispute between Beijing and Brussels.

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China initiated an anti-subsidy investigation on EU dairy imports, potentially responding to the EU’s tariff increases on Chinese electric vehicles.
The investigation targets companies like Royal A-ware Food Group, Arla Foods, and DMK Deutsches Milchkontor GmbH, and may conclude by August 2025, possibly extending to February 2026.
Chinese analysts expect minimal domestic market impact due to existing oversupply, while the EU may struggle to find alternative markets.

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Who’s Who

Royal A-ware Food Group: Royal A-ware Food Group is a dairy producer from the Netherlands. It is one of the companies that could be subject to China's anti-subsidy investigation on EU dairy imports. The probe was initiated at the request of Chinese industry groups and is part of a trade dispute between Beijing and Brussels.

Arla Foods: Arla Foods is a Denmark-based dairy producer that could be subject to China's anti-subsidy investigation on European Union dairy imports. The probe is part of a trade dispute between Beijing and Brussels. It targets various dairy imports, including those from major European producers like Arla Foods, in response to the EU’s increased tariffs on China-made electric vehicles. The investigation could affect the EU's ability to find alternative export markets.

DMK Deutsches Milchkontor GmbH: DMK Deutsches Milchkontor GmbH is a German dairy firm potentially subject to China’s anti-subsidy investigation on EU dairy imports. The probe, launched by China's Ministry of Commerce, aims to examine unfair subsidies on dairy products including cheese. The investigation, initiated in response to the EU’s increased tariffs on China-made electric vehicles, may conclude by August 2025, with a possible extension to February 2026.

Walmart Inc.: Walmart Inc. has two subsidiaries that import dairy products into China and could be subject to China's anti-subsidy investigation. This probe targets various dairy producers, including those associated with Walmart, as part of a broader trade dispute between China and the European Union.

BRIC Agricultural Big Data Technology Group Co. Ltd.: BRIC Agricultural Big Data Technology Group Co. Ltd. is mentioned in the article as an organization involved in agricultural research and procurement. Lin Guofa, a research director at the company, provided insights on the impact of China's dairy import probe, asserting that the investigation might ease domestic oversupply and that short-term effects would be minimal due to alternative imports from countries like New Zealand and Australia.

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What Happened When

August 8, 2024：: The average price of fresh milk fell 14.6% year-on-year to 3.21 yuan per kilogram in 10 producing provincial-level regions, according to the Ministry of Agriculture and Rural Affairs.