Bega boss Barry Irvin foreshadows changing consumer tastes in China

Chinese shoppers snapped up Australian dairy throughout the 2010s. But when it comes to the 2020s, the infant formula party may be over.

China’s appetite for Australian-made infant formula is unlikely to return to pre-pandemic levels, Bega’s chief executive has warned.

Barry Irvin told Bega’s annual meeting on Tuesday that the processor was seeking to expand its infant formula business into other markets following the vacuum created by the absence of diagou traders.

Diagous were mainly Chinese-born students based in Australia who sold infant formula back to the economic powerhouse.

Most returned to the homeland when the first coronavirus restrictions were implemented in late March 2020.

“We have a view there’s structural change in the infant formula and toddler category market, particularly related to China and associated with the collapse of the diagou channel,” Mr Irvin said. “(There are also) changes in consumer preferences in that market.

“We have been producing infant and toddler formula products for a great many years, it is very much part of our core competency, and we are very pleased to have that continue to have that as an important part of the overall business.”

Mr Irvin noted improved conditions across most of Australia’s dairy regions, adding that competition for milk supply remained “highly competitive.”