Some foreign dairy companies have promised not to raise prices in the next year or two, which is good news for Chinese parents. But even when prices do go up, sales are unlikely to fall.

"Compared to price cuts and promotions, I care more about whether my baby can drink safe milk," said Zhou, the Shanghai mother. "If quality can be assured, I will pay whatever."

Hard to come back

In the decade before 2008, China's dairy industry experienced rapid expansion, with the average annual growth of fresh and raw milk standing at 17.4 percent. Since 2008, the dairy industry has suffered a slowdown, with the average annual growth of fresh and raw milk plummeting to a mere 1.29 percent.

The melamine-tainted milk scandal was a catastrophe for domestic producer Sanlu, once the oldest and most popular brand of infant formula in China. Following the scandal, Sanlu's market share of 18.26 percent was wiped off the map, while Mengniu, Yili and Bright Dairy were hit hard too.

China has witnessed a surge in dairy imports. At a food safety awareness event held by the Ministry of Industry and Information Technology on June 18, Song Kungang, Honorary Director General of China Dairy Industry Association, stated that China imported 596,200 tons of dairy products during the first four months of this year, at a value of $2.08 billion, while domestic exports lingered at around 12,400 tons, worth a mere $24 million.

The 2008 milk incident has not only made Sanlu lose its shirt, but also changed the fate of many domestic milk powder manufacturers, forcing them to look to outside markets for their products.

Others are taking steps to build trust at home. In May, Danone and China National Cereals, Oils and Foodstuffs Corp. declared a joint venture, while Mengniu announced it will merge its yoghurt business with Danone. Bright Dairy acquired Synlait Milk in New Zealand in 2010.

Nonetheless, the moves may not be enough to appease Chinese consumers.

"I didn't have enough breast milk for my daughter, so formula milk has been a part of her diet since she was born. I use Mead Johnson because one of my friends told me children who drink imported formula are smarter, taller and healthier than others," said Jiang Rong, a young mother.

Foreign companies frequently raise their prices in China. Take Mead Johnson for example. The American company began increasing prices in September 2008 with a 15-percent markup. It raised its prices again by roughly 10 percent each time in 2011 and 2012.

Foreign dairy companies admit they profit handsomely from Chinese consumers but are quick to lower their prices once under the radar of the authorities. Still, Chinese mothers aren't unsettled by allegations of price-fixing by dairy companies.

Zhou, who gave up a well-paying job to stay at home, now devotes all her energy to watching her son.

"A higher price for foreign milk powder is reasonable in some ways. After all, quality is the only factor I consider when it comes to my baby."

 Email us at: dengyaqing@bjreview.com