New Zealand multi-million dollar cheese exports to China avoid chop
China has banned European soft cheeses because it says they contain too much bacteria, but Fonterra's multi-million dollar mozzarella, cheddar and cream cheese exports have so far eluded the crackdown.
Fonterra recently opened a massive cheese factory in Clandeboye, South Canterbury, at a cost of $240 million, where it converts milk into mozzarella in only six hours, compared to the usual three months.
Much of it is destined for China, where consumers are showing an increasing taste for pizza. Last year Fonterra's Greater China food service and consumer business showed strong growth, with earnings before interest and tax of $131m, up 191 per cent on the previous year.
In July Fonterra announced it would build two new cream cheese plants at Darfield, Canterbury at a cost of $150m. The first plant is due to be completed by August 2018 with a second to follow in either 2019 or 2020. Each will churn out 24,000 tonnes of cream cheese a year, all for export.
One of the drinks crazes in China is the "tea macchiato", a brew that mixes tea with cream and cream cheese.
But most of the pungent European cheeses that have been banned, such as camembert, brie and roquefort, are not eaten by Chinese who regard the smell as offputting.
It also appears the reason for the ban may be less to do with food safety and more related to a spat between Europe and China over foreigners buying European companies.
A Fonterra spokesman said Chinese regulators had different classifications for cheeses.
"Mozzarella falls under the 'unripened' category, whereas camembert/brie and other such cheeses are classified as 'ripened' which refers to the fermentation process and the length of time these specialty products age for. Mozzarella is fundamentally different, as it does not contain any fermented mould skin like brie/camembert does."
Last year New Zealand exported 51,000 tonnes of cheese to China, making it the clear leader among exporters, above Australia, the United States and France. Fonterra exports enough cheese to top half the pizzas (about 300 million) made in China each year.
New Zealand's primary cheese export to China is mozzarella, but it also exports cheddar, sliced processed cheese and cream cheese.
Europe is preparing a law to let member countries have the final say on a foreign takeover of a local company if the acquisition poses a risk to national security.
Foreign investors that are state controlled or are backed by state guarantees would face particular scrutiny - a direct threat to a number of Chinese companies.