Media reports have suggested talks are in their final stages between Shanghai-based Bright Food and private equity owners CHAMP, about acquiring a stake in Australian-based Manassen Food. If the acquisition goes ahead, it would mark one of the biggest overseas acquisitions for Bright Food since its establishment in 2006.
No one at Bright Food was available for comment prior to publication, but the company says on its website that it wants to be a strong competitive power with a deep influence in the world by 2015.
James Roy, senior analyst at China Market Research, said that the acquisition would be an overall positive from an industry perspective.
“Buying into an international brand helps Bright Food as it provides an assurance of better quality control in their supply chain,” he said. According to Roy, quality assurance is important in an industry he describes as very fragmented.
Bright Food, a state-owned conglomerate serving China’s food industry, has developed into a strong business throughout China with a number of well-known trademark and name brand products. But whilst it has a stronghold in China, Bright Food has yet to create a firm stronghold in the international markets and this deal could create just that, Roy said.
He said that the talks come at a delicate time for the food and beverage industry, with relations between consumers and manufacturers strained by past events, including the 2008 melamine scandal.
“Consumers have a lot of concerns - they stay away from any brands steeped in controversy,” he said. “There is more trust in international brands and consumers are going overseas to buy these trusted brands – many are going to Hong Kong to stock up on ‘safe brands’.”
China seeking trust in international brands
Roy said Bright Food’s attempt to expand into the international market via a partnership with Manassen Food is not only a business mission but it is also responds to a growing demand for branded, high-quality and trusted products from consumers in China. He said that in the current distressed industry climate the acquisition would be beneficial not only to Bright Food but also consumers.
Manassen Foods has a broad range of internationally recognised brands such as Laughing Cow Cheese, Carr’s Biscuits, Jelly Belly sweets and Ryvita. With a stake in Manassen Food, these brands could be brought to the Chinese market - providing a solution to the mistrust and concerns of China’s consumers, said Roy.
The latest talks come after Bright Food previously lost bids to acquire the French yoghurt maker Yoplait and Britain’s United Biscuits in the past two years. But Bright Food is determined to try and enter the international market. Roy said, for Bright Food, entry into the international market will also enable it to learn about international management and best practices within the industry.
“They are seeking outside knowledge,” he said.