Retailing, Franchising, and Consumerism Business Intelligence in China

Danone's Demise Makes Kraft Biscuits Number One In China

According to Kraft Foods (China), Kraft has basically completed its acquisition of Danone's biscuit business and biscuit products with the Danone brand are expected to disappear in the Chinese market from the beginning of 2009.

By then, Kraft, which owns such biscuit brands as Oreo and Pacific, will become the leading supplier in the Chinese biscuit market with over 20% market share.

Li Lingping, director for public affairs of Kraft Greater China, said that Kraft's acquisition of Danone's biscuit business had been finished, but the brand merger was still incomplete and products with Danone brands were still being sold. The company would replace the mark on Danone biscuit products with its own brand, but the detailed schedule would be determined by customer acceptance and brand identification. However, Li added that Danone's sub-brands would be kept after the merger.

Li also said Kraft's Chinese headquarters had been relocated from Beijing to Shanghai and Danone's three biscuit manufacturing plants have been taken over by Kraft. In the future, Kraft would focus on the medium and high-end biscuit market in China while the products originally marketed by Danone would be extended to low-end customers.

At the end of 2007, Kraft announced plans to acquire Danone's biscuit business for USD7.2 billion. According to Kraft Following the acquisition, the revenue from Kraft's biscuit sector is expected to account for 20% of the company's total revenue worldwide and its sales in the Chinese market may double.

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