Meiji exits China dairy business in $47.2m sale to AustAsia
Meiji Holdings is offloading its loss-making Chinese dairy operations to associate AustAsia for up to $47.2 million, a strategic retreat aimed at halting deepening losses that dragged down group profits.
Japan’s Meiji Holdings has agreed to sell its Chinese drinking milk and yogurt operations, including full ownership of production sites in Tianjin and Suzhou, to Shanghai AustAsia Food. The transaction is valued at up to 320 million yuan ($47.2 million), subject to net asset adjustments, and is expected to close by the end of the year.
The sale represents a decisive exit from a market that has severely damaged the company's bottom line. For the year ended March 31, Meiji’s group sales edged up 1.7 percent to Y1.17 trillion, but profit attributable to owners of the parent plummeted 31 percent to Y35.1 billion. The earnings decline was driven primarily by impairment losses linked to the Chinese dairy operations.
The underlying financial strain at the divested units explains the urgency of the move. Meiji (China) Investment, the holding company for the sold businesses, reported a net loss of 1.04 billion yuan for the year to December, more than doubling from a 490 million yuan loss a year earlier. The Tianjin plant saw revenue nearly double to 131 million yuan yet still posted a 50 million yuan operating loss. Meanwhile, the Suzhou facility swung from a 22 million yuan operating profit in 2024 to a 100 million yuan operating loss in 2025.
The buyer is an existing corporate partner. Meiji already holds a 15.85 percent stake in AustAsia Group, the parent company of Shanghai AustAsia Food. Acknowledging this relationship, Meiji told the Tokyo Stock Exchange it appointed external experts to address potential conflicts of interest and guarantee the "fairness and transparency" of the transaction.
However, Meiji is structuring the deal to retain some long-term value. The Tokyo-based food group will keep the intellectual property tied to its yogurt portfolio, alongside certain brands, and its Guangzhou manufacturing plant is excluded from the sale. Furthermore, Meiji intends to negotiate a separate trademark licensing agreement with the buyer for a limited product range over a fixed period.
Looking ahead, the company plans to redirect resources toward other segments within the Chinese market, specifically highlighting chocolate. This pivot allows Meiji to step away from the intensely competitive domestic liquid milk sector, where local players have aggressively driven down margins, while maintaining a presence with its broader portfolio of cheese, ice cream, confectionery, and pharmaceuticals.
