Chinese investment in branded milk a welcome shift for Tasmanian dairy industry

Flying fresh milk to China is a new opportunity for the Tasmanian dairy industry. ABC Rural: Brett Worthington

The move to ship fresh Tasmanian milk to China is a welcome shift away from the state's reliance on commodity products, according to a dairy industry leader.

Supplied. The company hopes to eventually fly VAN Milk to China three times a week.

The Chinese owner of Tasmanian dairy giantVan Dieman's Land Farms, Moon Lake Investments, has outlined a plan to export about 10 million litres of 'VAN Milk' from Hobart to Ningbo in north-east China, starting early next year.
Dairy Tasmania executive officer Mark Smith said it had taken a foreign investor to recognise the potential of the Tasmanian dairy brand.
Moon Lake managing director Sean Shwe said negotiations were underway with a number of airline companies and airports to initially fly weekly round trips, with a view to increasing flights to up to three times per week.
Mr Smith said the initiative was a huge exposure opportunity for the local industry.
The majority of Tasmanian milk is processed by milk companies into milk powders, which are not branded.
"[This is] something new for Tasmania," Mr Smith said.
"It is hopefully utilising our brand and gaining a maximum return, so Tasmania's reliance on non-branded commodity-style dairy products, that is the thing that needs to change over time," he said.
"It's very positive news for the Tasmanian dairy industry.
"It may develop into something bigger. The company is talking about 10 million litres, so that's not a huge quantity in regards to the whole scale of our industry, but it's an important new dimension.

"It's not going to be a panacea for the woes in the dairy industry at the moment, [but] it helps to take out the volatility that does occur when selling product into an international commodity market."
Mr Smith said the benefits could flow far wider.
"VDL is establishing this transport arrangement which might offer opportunity for other exporters from Tasmania, in terms of direct, high-value produce getting into the market place in China," he said.

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Other producers keen to ride on milk's coat tailsThat potential has not escaped the eyes of other producer groups.
Cherry producer and exporter Howard Hansen said growers were already facing capacity issues on flights out of Melbourne to China.

He said cherry growers would be able to deliver their crops to market 24 hours earlier if there was space on Moon Lake's flight.
"We're really excited about this initiative. Obviously it's going to be a fundamental change for Tasmania," he said.
"With a company like Moon Lake being able to underwrite the volume of direct air freight shipments, all other premium product producers in Tasmania can effectively ride on their coat tails.
"Maybe [Ningbo] wouldn't have been our most preferred option, but it's not far out of Shanghai, so that's an easy option, and then the plane's going from there back to Hong Kong."
Circular Head mayor Daryl Quilliam said Moon Lake's freight initiative was the "greatest thing that's happened to the dairy industry in my lifetime".
"Van Milk is a game changer for Circular Head and the dairy industry, but also for the state. The state is going to reap huge benefits from this," he said.
"It's going to lift the spirits of farmers."
 - ABC Rural.