China's two dairy giants Bright Dairy and Yili have released their financial reports for the third quarter of 2008 and, being affected by the melamine scandal, each of the companies made net losses of over CNY200 million in Q3.
According to the report from Bright Dairy, from July to September 2008, the company made net losses of CNY271 million. By September 30, 2008, the extra costs caused by such factors as product recalls and returned goods had reached CNY44.59 million. In addition, the report pointed that because the problems caused by the melamine scandal could not be eliminated in a short time, the company was still expected to make losses in the next quarter.
Yili's report said that the company made losses of CNY226 million in the third quarter of 2008, an increase of CNY213 million compared with the same period last year. The company's sales expenses, including advertising and marketing, increased CNY903 million compared with the same period last year, a year-on-year increase of 84.59%.
In September 2008, China's food safety regulators found melamine in milk powder and fresh milk products from some producers, including the country's top three dairy groups, Mengniu Dairy, Yili, and Bright Dairy. So far, Mengniu Dairy has not published its quarterly report.