The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

Meiji Holdings has agreed to sell its drinking milk, yogurt and B2B operations in China to Shanghai AustAsia Food for RMB 320 million (approx. $47.2 million).

The transaction will involve the transfer of the relevant operations within Meiji (China) Investment, Meiji Dairies Tianjin and Meiji Dairies Suzhou. Meiji will transfer its entire interest in the business, leaving it with no ownership following completion.

Before the deal closes, Meiji (China) Investment will move the operations covered by the agreement into a newly established subsidiary, which will then be transferred to Shanghai AustAsia Food.

Meiji said China’s dairy market has changed considerably in recent years due to diversifying consumer preferences, shifts in sales channels, increased competition and higher raw material and logistics costs.

The company said the divestment would allow it to reshape its Chinese portfolio and direct more resources towards priority areas, including its chocolate business.

The operations recorded net sales of RMB 422 million (approx. $62.4 million) and an operating loss of RMB 155 million (approx. $22.9 million) in the year ended December 2025. This compared with sales of RMB 403 million (approx. $59.5 million) and an operating loss of RMB 144 million (approx. $21.3 million) in 2024.

Certain intellectual property rights and brands associated with yogurt products, including those related to lactobacilli, are excluded from the transaction.

Meiji Food Guangzhou, which also manufactures products covered by the sale, will remain part of the Meiji group. Production of the affected dairy and B2B products at the Guangzhou site will end before completion, after which the facility will continue operating as a chocolate production base.

Shanghai AustAsia Food is a subsidiary of Hong Kong-listed AustAsia Group, which operates dairy farming, raw milk, beef cattle, animal feed and milk distribution businesses in China. Meiji currently holds a 15.85% stake in AustAsia Group and has an existing relationship with the company covering areas including raw material procurement.

Meiji said combining the operations with AustAsia’s existing infrastructure could support improvements in raw material sourcing, manufacturing efficiency, distribution and plant utilisation.

Following the transfer, AustAsia and the newly formed target company will take responsibility for operating the business and managing product quality. Meiji plans to license some of its trademarks for a limited range of products and for a defined period.

The licensing agreement will include quality standards, auditing rights and provisions allowing Meiji to withdraw the licence in the event of a serious quality issue.

The transaction is expected to close on 31 December 2026, subject to regulatory approval and other closing conditions.