MARKETING of WAFarmers First fresh milk in Dalian, China, has a tick of approval from WAFarmers president Tony York.
Mr York visited the port city of Dalian, in Liaoning Province, close to the border with North Korea, to inspect the China end of the fresh milk supply chain project this month before joining a CBH Group grower study tour of China and Vietnam.
He was taken on a tour of Dalian distribution outlets by WAFarmers project partner, Chinese businessman Sha Yi, who is the managing director of Perth-based food import company Lifeland (Aust) Pty Ltd.
"I guess you could say I was doing my due diligence on the project," Mr York said on Tuesday.
"I was there to check on Mr Sha's bona fides for myself.
"He and his brother run a very good business and he certainly has the local contacts and is a well-respected businessman in China.
"It was very interesting, our fresh milk is at the top end of the market.''
Mr York said WAFarmers First milk sells in a niche market for the equivalent of between $10 and $11 a litre.
"So it's right at the top end,'' he said.
"The milk is airfreighted in, collected and held in a refrigerated van and distributed to outlets around Dalian.
"In some outlets the milk is in special display fridges, in others it is in the normal dairy section refrigerated area with other products.
"The outlets are selected, high-value, gourmet food shops.
"I'm certainly satisfied there is a market there - Dalian is a developed city of six million people that was opened up to global markets 30 years ago.
"But it's a top-end niche market for our fresh milk, not a bulk market, and there is competition.
"Mr Sha is competing against fresh milk produced locally in China and coming in from South Korea which is much closer than we are.
"But they (affluent Dalian consumers) like our safe, clean and green reputation."
Mr York said the WAFarmers' fresh milk, bottled in one-litre containers for the venture by Harvey Fresh, was also competing against imported ESL (extended shelf life) milk.
He said Mr Sha was also trying to introduce WA yoghurt, supplied by Brownes Dairy in Balcatta, to Dalian.
"But there's a lot of yoghurt already on the market there, it's a very competitive market and there's a lot trying to get into the top end," he said.
Complex logistics was the biggest problem Mr Sha had to contend with for his weekly delivery of fresh milk, Mr York said.
"Every week is treated as a separate import so there's lots of red tape," he said.
Samples of each shipment were sent from the Harvey Fresh factory to the China Certification and Inspection Corporation Australia for testing and the quarantine and entry approvals forwarded to the milk's intended destination.
Mr York said the milk was flown by Singapore Airlines on the most direct international routes to airports closest to Dalian to minimise the potential risk of delays using domestic flights within China.
While Mr Sha hoped to eventually build volume to 5000 litres of milk a week, Mr York said he was "nowhere near that yet".
The venture was announced last September at WAFarmers' inaugural Heart of WA ball, and after two trial deliveries regular deliveries of fresh milk to Dalian started in April.