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Tetra Pak means “tetrahedral package” in Swedish. In today’s supermarkets in China， many liquid milk brands have their stuff packed in the tetrahedron-shaped package， a thing developed by the Swedish.
Tetra Pak is called the “arms dealer behind the dairy industry”. In China， it not only pushed Mengniu and Yili， two dairy brands located in the remote Inner Mongolia， to the top two places of Chinese dairy industry， but also took away about three quarters of their profits from each can of milk. It has earned a large amount of money and changed the situation of Chinese dairy industry： the fresh milk was no longer popular while the ultra-high temperature treated（UHT） milk， reconstituted milk and recombined milk rise quickly.
Last year， the Chinese government announced a three-month reorganization of the Chinese dairy industry and placed several foreign dairy enterprises under the investigation of the anti-monopolization investigation. One month later， Abbott， Mead Johnson and other four foreign dairy enterprises were fined of 670 million yuan because of the monopolization. In July 2013， China’s General Administration of Industry and Commerce （GAIC） announced the establishment of the case against Tetra Pak’s involvement into the abuse of its market dominance. More than 20 provincial/municipal industrial and commercial administrative bodies were recruited into the relevant investigations.
According to the announcement from GAIC， the government has received many anti-monopolization reports about Tetra Pak’s abuse of market dominance in recent years. This has shown that Tetra Pak made use of its advantages in the liquid food packaging devices and maintenance technologies for the tie-in sale of packaging materials and the differential treatment. This March， Zhang Mao， director of GAIC， said that the anti-monopolization investigation into Tetra Pak had already seen initial results.
However， half a year passed and there were no conclusions about the investigations into Tetra Pak. This could show the great strength of this company in the fight against monopolization.
Xiang Jianjun， a fellow in the food industry with China Investment Consultancy， says that Tetra Pak is going to be the largest victim if it is subject to the anti-monopolization investigation. That’s because Tetra Pak will lose many good clients and have its sales business affected. The downstream enterprises are going to look for new partners. There are many foreign and domestic enterprises with sterile soft packages in China as potential replacements， such as SIG Combibloc and Great View Package. Then， how did Tetra Pak get into China？ How did it win so many customers and the huge profits？ The development of Tetra Pak in China could reveal how the monopolization forms in that country？
Mutual Borrowing of Advantages
In 1979， the Tetra Pak filling ma-chine was used to produce the “Xianbao” chrysanthemum tea， marking this Swedish company’s official entry into the Chinese market. In the past 20 yeas， however， Tetra Pak mainly earned its profits from selling filling machines in China and was not a quite impressive force onto the Chinese market. At that time， Yili was only a small dairy enterprise located in the steppe of Inner Mongolia which produced low-temperature fresh milk and milk powder. In the mid 1990’s， Zheng Junhuai， current leader of Yili， went to South China on a tour inspection. The journey expended his viewpoints but annoyed him very much， because the dairy market at that time posed a great demand and the dairy enterprises in South China were planning to go public. In comparison， Yili， which mainly adopts the low-temperature sterilization technology， cannot keep the freshness of its products for long. The limited sales radius has shackled the development of the enterprise.
During his journey， Zheng Junhuai met Tetra Pak， the world’s paper packaging giant. To his surprise and joy， Tetra Pak could help Yili delay the expiration date of its products. On the other hand， Tetra Pak saw the boom of the dairy market in China. The two enterprises immediately reached an agreement.
Feng Qi， a dairy expert in China， says that the UHT milk comes from the ultra high temperature sterilization， as well as various additives. Therefore， the taste could be OK even if the crude milk has a low quality. Tempted by the potentials， Yili began to massively deploy in the UHT milk market.
Ensuing Yili was Mengniu. In 1999， Niu Gensheng founded this enterprise which only ranked at the 1116th place in China’s dairy market. At this critical time， Tetra Pak once again appeared as a “savior”. It sold the devices which were originally worth multi-million yuan to Mengniu at an extremely low price， forging the deep bonds with Mengniu. When Mengniu successfully made its IPO， the Tetra Pak team serving Mengniu and the management team of the company reportedly cried on each other’s shoulder.
What’s known to everybody is that Nick Shreiber， CEO of Tetra Pak， pointed at Niu Gensheng in the “2003 Tetra Pak Global Dairy Annual Conference” and said to the global dairy leaders： “The fastest growing dairy enterprise is China-based Mengniu led by him”.
With the great support of Tetra Pak， Yili and Mengniu， the two enterprises originated from the steppe， began their global expansion. Before 2000， the low-temperature fresh milk took the major part of the market， but the situation changed greatly after that year. According to the statistical data from AC Nielsen， from 2000 to 2004， the high-temperature sterilized milk products developed fast with the support of Tetra Pak， pushing the global share of low-temperature milk products to below 35%.
Tetra Pak： the Ultimate Winner
In the battle between low-temperature fresh milk and UHT milk， Yili and Mengniu rose and became the national leading dairy giants. But their achievements pale in front of the gains of Tetra Pak. According to the data from its official website， Tetra Pak sold 173.2 billion packs with the sales income of 11.155 billion euros. More than one third of the income comes from the Chinese market.
According to Tetra Pak’s president Dennis Jonsson， China has become the largest national market of Tetra Pak in the world.
Then， how did Tetra Pak become the biggest winner behind the Chinese dairy industry？
“Tetra Pak set up a trap. They started with giving enterprises the devices and instructed them about the advertising and marketing to help them open up the market with the UHT milk. When the UHT milk from Yili， Mengniu and others could find no components in this country， Tetra Pak， the supplier of these milk products’ packages， took the market as well，” says Wang Dingmian， president of Guangzhou Municipal Dairy Industrial Association.
Zhou Jun， who once worked for Yili， says that Tetra Pak gradually shifted its profitearning tool from filling machines to the packaging materials after setting up a packaging material plant in China in the 1990’s.“Tetra Pak almost sent the devices to the dairy enterprises free of charge as long as they are in need of devices and materials. It even gave them free instructions about how to use these machines. Then， it began to sell packaging materials to these enterprises and earn money from this part.”
It is known that Tetra Pak has the ID tags attached to its packaging materials. The filling machines of Tetra Pak could only work when “seeing” these tags. They will automatically stop functioning if the clients use the materials of other companies.
This might be a bit exaggerated. Tetra Pak denied their involvement in the bundle sale in every possible occasion. But the feedbacks from the other dairy enterprises confirmed the incompatibility of Tetra Pak’s machines with other brands of packaging materials. Even if they can work with each other， the quality cannot be guaranteed. Thus， these dairy enterprises could only use the packaging materials of Tetra Pak even though the price is much higher than the average level of the industry. This pattern of “selling the machines with the materials” is the key to Tetra Pak’s compelling victory in the market. When Yili and Mengniu are pulling up the sales of UHT milk， the dairy products inside Tetra Pak’s packages are gradually accepted by the market. After having the industrial position established， Tetra Pak became less generous than before.
In 2000， Gao Jianfeng， the director of a less known dairy enterprise， began to seek cooperation with Tetra Pak as well. “At that time， the Tetra Pak packages have become mainstream in the market. They do not have many production lines and the products are hard to be bought. For us which were not quite influential， Tetra Pak did not give too big a discount.”
As Gao Jianfeng said， they only paid less than 50% of the total price of Tetra Pak’s product despite the small discounts. Before his resignation in 2004， this enterprise was always using the packaging materials of Tetra Pak.
“In the golden period of the UHT milk， only two factors could limit the expansion of dairy enterprises： the source of crude milk and the production capacity of Tetra Pak，” Gao Jianfeng says. This could show the influence of Tetra Pak in China’s domestic dairy enterprises.
This also helped Tetra Pak earn a lot of profits from China. Once for a while， the cost of pack accounted for 40% of the total cost of each box of milk. The dairy enterprise could only get one quarter of the profits by selling a Tetra-Pak-packed box of milk while Tetra Pak could get the rest three quarters. Therefore， someone says that Mengniu and Yili are actually working for Tetra Pak.
In 2012， the net sales of Tetra Pak in the world hit 11.155 billion euros， which is quite close to the sum of the operating revenue of Mengniu， Yili and Bright Dairy in that year.
An authority once estimated the profit margin of Tetra Pak at 20% or so. In China， the earliest joint venture of Tetra Pak realized the net profits of 239 million yuan along with the 22.27% profit margin in 2010. In 2013， the total revenue of Mengniu hit 43.36 billion yuan but its net profits were only 1.63 billion yuan. The profit margin was only 3.76%.
Early in 1991， Tetra Pak was sentenced to pay the fine of 75 million euros by the European Unions for its abuse of dominance and the bundle sale in the European market of liquid product packages.
In 2004， Prof. Sheng Jieming with Peking University finished a report called Beware the Limitation on Competition by Foreign Companies， based on which the GAID issued relevant measures to handle the mo
nopolization of foreign companies in China.
Coincidentally， Prof Sheng Jieming and his assistants just found their materials from the study into Tetra Pak’s business pattern in China. They initiated the study into this company from a Chinese company’s accusation of Tetra Pak’s violation of the Law of Price in its bundle sale of devices， packaging materials and setup of industrial barriers.
The War between Fresh Milk and Pasteurized Milk
“At that time， the packaging industry in China was still a brand new industry. Since the dairy industry is developing very fast， the rise of Tetra Pak just filled the deficit in the produc- tion capacity. The success of Tetra Pak was a result of the historical particularity， says Song Liang， a dairy expert in China.
But Tetra Pak’s power was more than this. With its assistance， the UHT milk of Mengniu and Yili took the market share in an amazing speed. The enterprises of fresh milk did not sit idly and do nothing. By 2004， Bright Dairy， New Hope， Yantang and Sanyuan had already formed the alliance with U.S.-based International Paper.
The war between UHT milk and fresh milk was close to breaking out， behind which was the close combat between Tetra Pak and International Paper.
When the entire dairy industry in China was busy with the debate over the fresh milk and UHT milk， Tetra Pak even made use of the power of media to “teach” consumers about the defects of fresh milk. It was warned and punished by the Guangdong Provincial Association of Milk.
In February 2005， the Standardization Management of China held a meeting to talk about the “freshness”of milk products and its importance. The present guests include the government officials from the Ministry of Health， the Ministry of Agriculture， the directors of Chinese Association of Milk and leaders of Sanyuan， Mengniu， Yili and so son.
What’s interesting is that a letter from Yang Bing， PR director of Tetra Pak China， was sent to the meeting room as well and read by almost all present guests. In the letter Tetra Pak showed its strong will of supporting the UHT milk. “In such a high-class seminar we could see a foreign company. It is quite ridiculous and unfitting to have the relevant foreign enterprises’ ideas affect the pres-ent experts，” says Wang Dingmian， who was also present in the meeting.
The result of the war is known to everyone. The low-temperature milk could not have the “fresh milk” or other similar tags attached to its packages. Instead， they could only use “sterilized milk” or “pasteurized milk”. The lowtemperature milk， which highlighted the “freshness with nutrients”， was forced to change its identity. The ban was not lifted until January 1， 2008， but by then the pasteurized milk had lost more than half of its market. The UHT milk and re-combined milk got the compelling victory and took the dominant place in liquid milk market. Even though no one would admit， the debate over the “freshness” of milk products is actually the conflict between the group of Mengniu， Yili and Tetra Pak and the one of Bright Dairy， Sanyuan and International Paper.
However， with International Paper being acquired by Combibloc， its plan of expanding the pasteurization package in China was completely aborted. Then， the entire market was under the reign of Tetra Pak.
It is undeniable that Tetra Pak’s leading position in the world is not the result of its “bundle sale” pattern. Its advanced technologies are its real trumps and the key to its success. It is reported to have more than 5000 patents and is applying for 2800 more.
“Presently， there are about 40-50 enterprises involved in the liquid product packaging industry. Tetra Pak’s products represent the highest quality. For example， Tetra Pak could keep the ratio of bad packages below one tenthousandth while the average level of Chinese companies is between two ten-thousandths and three ten-thousandths，” Wang Dingmian says.
In addition， the duration of UHT milk has great differences in the Tetra Pak packages and others. “The difference is as high as 20%-30%. In another word， if Tetra Pak can keep the stuff fresh for half a year， the other packages could only last four to five months，”Dong Jianfeng says.
Wang Dingmian once visited the headquarters of Tetra Pak in Sweden. He was amazed by the fact that 60%-70% of the workers there are technicians. The high quality of Tetra Pak’s products is far beyond the Chinese domestic enterprises， which ensures its leading position.
Trapped in Anti-Monopolization Storm
With the establishment of enterprises by Combibloc in China and the rise of Chinese domestic packaging enterprises， the market share of Tetra Pak has dropped. According to the data from Frost & Sullivan， in 2009， Tetra Pak took 80.2% of the sterilized package market in China.
In today’s sterilized package market of China， Tetra Pak could still take more than half of the market. “The Chinese dairy industry needs 110-120 billion sterilized packages every year， of which 50-60 billion are provided by Tetra Pak，” says Wang Dingmian. Now， the most two important clients of Tetra Pak are still Yili and Mengniu. “The two take at least 65% of the products Tetra Pak sold in China，” says a dairy expert.
However， the anti-monopolization storm against the foreign dairy brands and the new dairy policies have changed the dairy industry a bit. For example， Dumex， which was the longterm champion in the infant formula in terms of the market share， was forced out of the top 10 in this year according to the data from AC Nielsen.
Xiang Jianjun says that the antimonopolization investigations into foreign dairy brands in China have achieved great results. Some of the foreign companies have lowered the price of their products. This is a warning for Tetra Pak as well.
“In these two years， Tetra Pak became much less arrogant. It made some changes too. The bundle sale is partially abandoned and the price for packaging material cut by half，” Wang Dingmian says.
Tetra Pak is called the “arms dealer behind the dairy industry”. In China， it not only pushed Mengniu and Yili， two dairy brands located in the remote Inner Mongolia， to the top two places of Chinese dairy industry， but also took away about three quarters of their profits from each can of milk. It has earned a large amount of money and changed the situation of Chinese dairy industry： the fresh milk was no longer popular while the ultra-high temperature treated（UHT） milk， reconstituted milk and recombined milk rise quickly.
Last year， the Chinese government announced a three-month reorganization of the Chinese dairy industry and placed several foreign dairy enterprises under the investigation of the anti-monopolization investigation. One month later， Abbott， Mead Johnson and other four foreign dairy enterprises were fined of 670 million yuan because of the monopolization. In July 2013， China’s General Administration of Industry and Commerce （GAIC） announced the establishment of the case against Tetra Pak’s involvement into the abuse of its market dominance. More than 20 provincial/municipal industrial and commercial administrative bodies were recruited into the relevant investigations.
According to the announcement from GAIC， the government has received many anti-monopolization reports about Tetra Pak’s abuse of market dominance in recent years. This has shown that Tetra Pak made use of its advantages in the liquid food packaging devices and maintenance technologies for the tie-in sale of packaging materials and the differential treatment. This March， Zhang Mao， director of GAIC， said that the anti-monopolization investigation into Tetra Pak had already seen initial results.
However， half a year passed and there were no conclusions about the investigations into Tetra Pak. This could show the great strength of this company in the fight against monopolization.
Xiang Jianjun， a fellow in the food industry with China Investment Consultancy， says that Tetra Pak is going to be the largest victim if it is subject to the anti-monopolization investigation. That’s because Tetra Pak will lose many good clients and have its sales business affected. The downstream enterprises are going to look for new partners. There are many foreign and domestic enterprises with sterile soft packages in China as potential replacements， such as SIG Combibloc and Great View Package. Then， how did Tetra Pak get into China？ How did it win so many customers and the huge profits？ The development of Tetra Pak in China could reveal how the monopolization forms in that country？
Mutual Borrowing of Advantages
In 1979， the Tetra Pak filling ma-chine was used to produce the “Xianbao” chrysanthemum tea， marking this Swedish company’s official entry into the Chinese market. In the past 20 yeas， however， Tetra Pak mainly earned its profits from selling filling machines in China and was not a quite impressive force onto the Chinese market. At that time， Yili was only a small dairy enterprise located in the steppe of Inner Mongolia which produced low-temperature fresh milk and milk powder. In the mid 1990’s， Zheng Junhuai， current leader of Yili， went to South China on a tour inspection. The journey expended his viewpoints but annoyed him very much， because the dairy market at that time posed a great demand and the dairy enterprises in South China were planning to go public. In comparison， Yili， which mainly adopts the low-temperature sterilization technology， cannot keep the freshness of its products for long. The limited sales radius has shackled the development of the enterprise.
During his journey， Zheng Junhuai met Tetra Pak， the world’s paper packaging giant. To his surprise and joy， Tetra Pak could help Yili delay the expiration date of its products. On the other hand， Tetra Pak saw the boom of the dairy market in China. The two enterprises immediately reached an agreement.
Feng Qi， a dairy expert in China， says that the UHT milk comes from the ultra high temperature sterilization， as well as various additives. Therefore， the taste could be OK even if the crude milk has a low quality. Tempted by the potentials， Yili began to massively deploy in the UHT milk market.
Ensuing Yili was Mengniu. In 1999， Niu Gensheng founded this enterprise which only ranked at the 1116th place in China’s dairy market. At this critical time， Tetra Pak once again appeared as a “savior”. It sold the devices which were originally worth multi-million yuan to Mengniu at an extremely low price， forging the deep bonds with Mengniu. When Mengniu successfully made its IPO， the Tetra Pak team serving Mengniu and the management team of the company reportedly cried on each other’s shoulder.
What’s known to everybody is that Nick Shreiber， CEO of Tetra Pak， pointed at Niu Gensheng in the “2003 Tetra Pak Global Dairy Annual Conference” and said to the global dairy leaders： “The fastest growing dairy enterprise is China-based Mengniu led by him”.
With the great support of Tetra Pak， Yili and Mengniu， the two enterprises originated from the steppe， began their global expansion. Before 2000， the low-temperature fresh milk took the major part of the market， but the situation changed greatly after that year. According to the statistical data from AC Nielsen， from 2000 to 2004， the high-temperature sterilized milk products developed fast with the support of Tetra Pak， pushing the global share of low-temperature milk products to below 35%.
Tetra Pak： the Ultimate Winner
In the battle between low-temperature fresh milk and UHT milk， Yili and Mengniu rose and became the national leading dairy giants. But their achievements pale in front of the gains of Tetra Pak. According to the data from its official website， Tetra Pak sold 173.2 billion packs with the sales income of 11.155 billion euros. More than one third of the income comes from the Chinese market.
According to Tetra Pak’s president Dennis Jonsson， China has become the largest national market of Tetra Pak in the world.
Then， how did Tetra Pak become the biggest winner behind the Chinese dairy industry？
“Tetra Pak set up a trap. They started with giving enterprises the devices and instructed them about the advertising and marketing to help them open up the market with the UHT milk. When the UHT milk from Yili， Mengniu and others could find no components in this country， Tetra Pak， the supplier of these milk products’ packages， took the market as well，” says Wang Dingmian， president of Guangzhou Municipal Dairy Industrial Association.
Zhou Jun， who once worked for Yili， says that Tetra Pak gradually shifted its profitearning tool from filling machines to the packaging materials after setting up a packaging material plant in China in the 1990’s.“Tetra Pak almost sent the devices to the dairy enterprises free of charge as long as they are in need of devices and materials. It even gave them free instructions about how to use these machines. Then， it began to sell packaging materials to these enterprises and earn money from this part.”
It is known that Tetra Pak has the ID tags attached to its packaging materials. The filling machines of Tetra Pak could only work when “seeing” these tags. They will automatically stop functioning if the clients use the materials of other companies.
This might be a bit exaggerated. Tetra Pak denied their involvement in the bundle sale in every possible occasion. But the feedbacks from the other dairy enterprises confirmed the incompatibility of Tetra Pak’s machines with other brands of packaging materials. Even if they can work with each other， the quality cannot be guaranteed. Thus， these dairy enterprises could only use the packaging materials of Tetra Pak even though the price is much higher than the average level of the industry. This pattern of “selling the machines with the materials” is the key to Tetra Pak’s compelling victory in the market. When Yili and Mengniu are pulling up the sales of UHT milk， the dairy products inside Tetra Pak’s packages are gradually accepted by the market. After having the industrial position established， Tetra Pak became less generous than before.
In 2000， Gao Jianfeng， the director of a less known dairy enterprise， began to seek cooperation with Tetra Pak as well. “At that time， the Tetra Pak packages have become mainstream in the market. They do not have many production lines and the products are hard to be bought. For us which were not quite influential， Tetra Pak did not give too big a discount.”
As Gao Jianfeng said， they only paid less than 50% of the total price of Tetra Pak’s product despite the small discounts. Before his resignation in 2004， this enterprise was always using the packaging materials of Tetra Pak.
“In the golden period of the UHT milk， only two factors could limit the expansion of dairy enterprises： the source of crude milk and the production capacity of Tetra Pak，” Gao Jianfeng says. This could show the influence of Tetra Pak in China’s domestic dairy enterprises.
This also helped Tetra Pak earn a lot of profits from China. Once for a while， the cost of pack accounted for 40% of the total cost of each box of milk. The dairy enterprise could only get one quarter of the profits by selling a Tetra-Pak-packed box of milk while Tetra Pak could get the rest three quarters. Therefore， someone says that Mengniu and Yili are actually working for Tetra Pak.
In 2012， the net sales of Tetra Pak in the world hit 11.155 billion euros， which is quite close to the sum of the operating revenue of Mengniu， Yili and Bright Dairy in that year.
An authority once estimated the profit margin of Tetra Pak at 20% or so. In China， the earliest joint venture of Tetra Pak realized the net profits of 239 million yuan along with the 22.27% profit margin in 2010. In 2013， the total revenue of Mengniu hit 43.36 billion yuan but its net profits were only 1.63 billion yuan. The profit margin was only 3.76%.
Early in 1991， Tetra Pak was sentenced to pay the fine of 75 million euros by the European Unions for its abuse of dominance and the bundle sale in the European market of liquid product packages.
In 2004， Prof. Sheng Jieming with Peking University finished a report called Beware the Limitation on Competition by Foreign Companies， based on which the GAID issued relevant measures to handle the mo
nopolization of foreign companies in China.
Coincidentally， Prof Sheng Jieming and his assistants just found their materials from the study into Tetra Pak’s business pattern in China. They initiated the study into this company from a Chinese company’s accusation of Tetra Pak’s violation of the Law of Price in its bundle sale of devices， packaging materials and setup of industrial barriers.
The War between Fresh Milk and Pasteurized Milk
“At that time， the packaging industry in China was still a brand new industry. Since the dairy industry is developing very fast， the rise of Tetra Pak just filled the deficit in the produc- tion capacity. The success of Tetra Pak was a result of the historical particularity， says Song Liang， a dairy expert in China.
But Tetra Pak’s power was more than this. With its assistance， the UHT milk of Mengniu and Yili took the market share in an amazing speed. The enterprises of fresh milk did not sit idly and do nothing. By 2004， Bright Dairy， New Hope， Yantang and Sanyuan had already formed the alliance with U.S.-based International Paper.
The war between UHT milk and fresh milk was close to breaking out， behind which was the close combat between Tetra Pak and International Paper.
When the entire dairy industry in China was busy with the debate over the fresh milk and UHT milk， Tetra Pak even made use of the power of media to “teach” consumers about the defects of fresh milk. It was warned and punished by the Guangdong Provincial Association of Milk.
In February 2005， the Standardization Management of China held a meeting to talk about the “freshness”of milk products and its importance. The present guests include the government officials from the Ministry of Health， the Ministry of Agriculture， the directors of Chinese Association of Milk and leaders of Sanyuan， Mengniu， Yili and so son.
What’s interesting is that a letter from Yang Bing， PR director of Tetra Pak China， was sent to the meeting room as well and read by almost all present guests. In the letter Tetra Pak showed its strong will of supporting the UHT milk. “In such a high-class seminar we could see a foreign company. It is quite ridiculous and unfitting to have the relevant foreign enterprises’ ideas affect the pres-ent experts，” says Wang Dingmian， who was also present in the meeting.
The result of the war is known to everyone. The low-temperature milk could not have the “fresh milk” or other similar tags attached to its packages. Instead， they could only use “sterilized milk” or “pasteurized milk”. The lowtemperature milk， which highlighted the “freshness with nutrients”， was forced to change its identity. The ban was not lifted until January 1， 2008， but by then the pasteurized milk had lost more than half of its market. The UHT milk and re-combined milk got the compelling victory and took the dominant place in liquid milk market. Even though no one would admit， the debate over the “freshness” of milk products is actually the conflict between the group of Mengniu， Yili and Tetra Pak and the one of Bright Dairy， Sanyuan and International Paper.
However， with International Paper being acquired by Combibloc， its plan of expanding the pasteurization package in China was completely aborted. Then， the entire market was under the reign of Tetra Pak.
It is undeniable that Tetra Pak’s leading position in the world is not the result of its “bundle sale” pattern. Its advanced technologies are its real trumps and the key to its success. It is reported to have more than 5000 patents and is applying for 2800 more.
“Presently， there are about 40-50 enterprises involved in the liquid product packaging industry. Tetra Pak’s products represent the highest quality. For example， Tetra Pak could keep the ratio of bad packages below one tenthousandth while the average level of Chinese companies is between two ten-thousandths and three ten-thousandths，” Wang Dingmian says.
In addition， the duration of UHT milk has great differences in the Tetra Pak packages and others. “The difference is as high as 20%-30%. In another word， if Tetra Pak can keep the stuff fresh for half a year， the other packages could only last four to five months，”Dong Jianfeng says.
Wang Dingmian once visited the headquarters of Tetra Pak in Sweden. He was amazed by the fact that 60%-70% of the workers there are technicians. The high quality of Tetra Pak’s products is far beyond the Chinese domestic enterprises， which ensures its leading position.
Trapped in Anti-Monopolization Storm
With the establishment of enterprises by Combibloc in China and the rise of Chinese domestic packaging enterprises， the market share of Tetra Pak has dropped. According to the data from Frost & Sullivan， in 2009， Tetra Pak took 80.2% of the sterilized package market in China.
In today’s sterilized package market of China， Tetra Pak could still take more than half of the market. “The Chinese dairy industry needs 110-120 billion sterilized packages every year， of which 50-60 billion are provided by Tetra Pak，” says Wang Dingmian. Now， the most two important clients of Tetra Pak are still Yili and Mengniu. “The two take at least 65% of the products Tetra Pak sold in China，” says a dairy expert.
However， the anti-monopolization storm against the foreign dairy brands and the new dairy policies have changed the dairy industry a bit. For example， Dumex， which was the longterm champion in the infant formula in terms of the market share， was forced out of the top 10 in this year according to the data from AC Nielsen.
Xiang Jianjun says that the antimonopolization investigations into foreign dairy brands in China have achieved great results. Some of the foreign companies have lowered the price of their products. This is a warning for Tetra Pak as well.
“In these two years， Tetra Pak became much less arrogant. It made some changes too. The bundle sale is partially abandoned and the price for packaging material cut by half，” Wang Dingmian says.