The Great Purchase of Bright Diary

At the beginning of this month, Bright Dairy, a diary and food company in China, announced to take over 60% of the stock of Vita Wheat, which worth totally 1.2 billion pounds. Lion Capital will keep the other 40% of the stock.

This has been the largest oversea purchase ever in Chinese food industry. The purchase may also affect the food processing industry in China.

The Bright Dairy (Source: hudong.com)

According to Eastmoney, the products of Vita Wheat are sold over 80 countries. Except for the wheat products, it also owns Alpen, the bestseller brand of oat in the UK. Vita Wheat has a history of 70 years, starting from 1932. 

Since the Vita Wheat is the second largest manufacturer of cereal and grain food in the UK, it has the same strategic direction with Bright Dairy. Therefore, Bright Dairy can learn the manufacturing, researches and developments, marketing and also other experience of the Vita Wheat.

Product of Vita Wheat 

(Source: foodiewanderings.blogspot.com)

What’s more, this purchase can also accelerate the expansion of Bright Dairy in European countries. In this way the market share will also be promoted. The merger also promotes the economic benefits, enhancing the brand awareness.

Although the purchase may bring about some future prospects, there are still some obstacles in this activity, including law, political and financial problems. For example, the local population may resist the coming of external enterprises, so the Bright Dairy has to take the cultural issues into account.

On the other hand, there are still risks on marketing. First, the marketing talents are not suitable for the UK market, which will lead to a decrease on the sales of the wheat. Second, the exploitation is different in UK than in China, so it may reach a limit. Third, the pricing of the products should be proper to attract more consumers.

The local market should always be concerned.

(Source:johnmariani.com)

To enlarge the economic benefits, the integration after the purchase is very important. The Bright Dairy needs to combine the two enterprise cultures together. Some proper methods include increasing the benefits for workers, solving the problem of unemployment and promoting environmental protection, to build up a good corporate image to workers and consumers.