These are many food health issues in China, especially including milk powder industries. Many parents do not trust the quality of milk powder, because there were some cases that local milk powder made children dead in the past. So they prefer foreign brands, like Hipp and Topfer, and they can just overseas purchase.This situation leads a big selling problem to Chinese milk powder industries. The amount of sales dramatically reduced from 2010 to 2013.

On 8th November, 2013, a manager who works in a private enterprise made an announcement. It was said that the plan of acquisitions and reorganizations for milk powder companies was already in the process. The aim for this plan is to reduce the number of milk powder companies to about 50 until 2018. The first company that was got acquisitions was Yashili, by Mengniu. Actually, the reputation of its milk powder products that Mengniu had before was not good. However, Yashili had a very good strong milk powder industry. So after the acquisitions, Mengniu reduced the brand gap compared with others and gained good consumer responses. I believe this kind of acquisitions is really helpful for Mengniu in its milk powder aspect. In addition, those small and unpopular milk powder industries will be purchased by grand and famous company, which is a good thing.

Reference: http://theglobaldairy.com/noticias/mengniu-offers-to-buy-yashili-26633/