Recently, the Chinese milk market has seen a comprehensive price reduction, with both high-end and budget products collectively promoting sales. Against the backdrop of continued low raw milk prices and weakening consumer trends, various high-end ambient milk products have begun to lower prices for promotions, intensifying the industry’s “price squeeze”.
According to mainland media “Jiemian News”, high-end milk products such as Tetra Pak and Yili Jin Dian have joined the price war. These milks are usually priced around 49.9 yuan (RMB), but are currently on sale for 39.9 yuan, a reduction of around 20%.
Jin Dian milk is the high-end brand of Yili organic pure milk; Tetra Pak is the high-end brand of Mengniu organic pure milk. Yili and Mengniu are both giants in the Chinese dairy industry.
Mengniu disclosed in its latest financial report that its liquid milk business, especially ambient milk, has dragged down overall performance. A key reason is the temporary oversupply of raw milk in the industry leading to low raw milk prices, forcing leading brands to follow suit and lower prices.
Industry insiders have said that if high-end products do not follow suit in lowering prices, “market share will be harder to maintain”.
Some distributors stated that the price war is still ongoing this year. In addition to sacrificing profits for sales volume with high-end positioning products, discounts on small brands, local brands, and some custom e-commerce brand milks are even more fierce.
For example, Walmart’s own-brand milk is sold for as low as 7.99 yuan per liter, while customized milk from JD.com’s Seven Fresh supermarket is also sold at a low price. These products are mostly produced by small and medium-sized dairy companies, posing a challenge to traditional brands.
The direct cause of the price drop comes from the upstream. Currently, the price of raw milk in mainland China is still declining, with the downward cycle lasting for more than three years. Monitoring data from the Ministry of Agriculture and Rural Affairs shows that the average national price of fresh milk in March 2026 was about 3.03 yuan per kilogram, a decrease of over 30% from the peak of 4.37 yuan per kilogram in 2021. Investor report data shows that the cost for dairy farms is generally between 3.2 and 3.5 yuan per kilogram, and milk prices have fallen below the cost line, with the industry overall facing losses of over 80%. Listed raw milk company “Modern Dairy” recorded a net loss of about 1.129 billion yuan in 2025.
Song Liang, head of the China Agricultural Dairy Industry Alliance expert group, analyzed to “Jiemian News” that because milk prices are at a low point, many farms will sell raw milk to small dairy factories. These factories will accept some retail-owned brand orders through price advantages, to a certain extent, this competition also cannibalizes the market share of large brands in the retail channel.