China’s largest dairy company is buying Australia’s second largest milk processor Lion Dairy.

The Chinese dairy giant, Mengniu Dairy will pay $600-million to take over the Lion Dairy & Drinks portfolio from the Japanese beverage giant Kirin.

Some brands in the Lion Dairy portfolio include Dairy Farmers, Pura Milk, Yoplait yogurt, Big M, Dare and Farmers Union iced coffee, Vitasoy soy milk and juice brand Daily Juice.

Mengniu Dairy also purchased infant formula manufacturer Bellamy’s Australia in a $1.5-billion takeover bid earlier this month.

President of Dairy Connect and a Gloucester dairy operator, Graham Forbes tells Ross Greenwood Australian dairy production is collapsing at the moment.

“We’re an importer of dairy products now… there’s a real big picture problem out there.”

Mr Forbes says from a dairy farmers perspective they are fighting hard to ensure there is adequate supply agreements with these multinational companies.

“The way the industry is going at the moment fresh milk supplies will continue to dwindle and we’ll see alternates, whether it’s powdered milk reconstituted will come into the market.”

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Image: Getty / Bloomberg