---
title: "Vitasoy Faces a 'Crisis Amid Prosperity': Beverages Repeatedly Denied Entry, High-Level Reshuffle Fails to Mask Channel Deficiencies"
description: "Recently, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) announced that in November 2017, a batch of Vitasoy soy milk drinks (480ml) was denied entry due to the excessive use of nutritional fortifier D-calcium pantothenate. This batch, totaling 2.2 tons, was imported by Shenzhen Yilingjiu Trading Co., Ltd. Prior to this, Vitasoy had also been denied entry on similar grounds, topping the 'blacklist' in September with 63 batches of substandard beverages."
author: "New Distribution"
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published: "2018-01-09"
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# Vitasoy Faces a 'Crisis Amid Prosperity': Beverages Repeatedly Denied Entry, High-Level Reshuffle Fails to Mask Channel Deficiencies

> Recently, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) announced that in November 2017, a batch of Vitasoy soy milk drinks (480ml) was denied entry due to the excessive use of nutritional fortifier D-calcium pantothenate. This batch, totaling 2.2 tons, was imported by Shenzhen Yilingjiu Trading Co., Ltd. Prior to this, Vitasoy had also been denied entry on similar grounds, topping the 'blacklist' in September with 63 batches of substandard beverages.

**Recently, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) announced that in November 2017, a batch of Vitasoy soy milk drinks (480ml) was denied entry due to the excessive use of nutritional fortifier D-calcium pantothenate. This batch, totaling 2.2 tons, was imported by Shenzhen Yilingjiu Trading Co., Ltd.**
**Substandard Beverage Tests Raise Concerns for Key Products**
Previously, Vitasoy had also been denied entry on similar grounds. According to the AQSIQ's list of food products not allowed entry in September, Vitasoy topped the 'blacklist' with 63 batches of substandard beverages. In April of last year, Vitasoy distilled water and beverages were returned due to labeling issues; in August, Vitasoy honey lemon tea and apple green tea beverages were denied entry for exceeding shelf life. As early as 2014, Vitasoy lemon tea had appeared on the blacklist of substandard imported products.
In fact, besides its flagship soy milk, the older product Vitasoy lemon tea suddenly became popular online in the second half of 2016, once becoming Vitasoy's strongest growth point. As is well known, beverages, as typical FMCG products, have strong immediate consumption attributes, and offline channels remain the most important for all beverage companies. For example, Uni-President, Master Kong, and Nongfu all regard their channels as the cornerstone of their industry presence.
**Price Differences Between Domestic and Overseas Markets, Disparity in Market Heat**
According to Hexun.com, Vitasoy's sales revenue currently comes from Mainland China, Hong Kong operations (Hong Kong, Macau, and exports), Australia, and Singapore. Among these, Mainland China remains the largest revenue source, accounting for 49%, followed by the Hong Kong market at 40%, with Australia and Singapore at 9% and 2% respectively.
Despite Vitasoy's rapid expansion in the mainland market, its overseas business is relatively sluggish. According to its 2016-2017 annual report, Vitasoy's revenue declined by 3% year-on-year, mainly due to the sale of its mainstream North American business and the Shanshui brand business. Additionally, Vitasoy's operating profit in Hong Kong fell by 1%, and sales in Singapore dropped by 5%.
Zhu Danpeng, a Chinese food industry analyst, believes that Vitasoy products are quite popular in the mainland market, and the profit difference between overseas and mainland markets drives overseas products to flow into the mainland. "The unsatisfactory sales in the Hong Kong market are also one of the reasons for products flowing from Hong Kong to the mainland. Moreover, there are differences in relevant standards between the mainland and Hong Kong, leading to situations where products are found non-compliant upon entry. This also reflects the overall chaotic management within Vitasoy."
**High-Level Resignation Turmoil, Mainland Expansion Faces Bottlenecks**
In October last year, Yuan Jie, Managing Director of Vitasoy China, resigned due to personal career development. It is reported that Yuan Jie had served Vitasoy for 13 years, and after his departure, no successor was appointed; instead, the Group CEO took over temporarily, indicating that the resignation was sudden and Vitasoy had not prepared in advance.
Related analyses suggest that the resignation of Vitasoy's senior executives may be related to chaotic channel management.
In fact, sales in the South China region account for over 80% of Vitasoy's total sales. As early as April last year, Vitasoy China experienced a major personnel shakeup, with eight sales executives, including National Sales Director Lin Ke and former South China Sales Director Chen Yuanqing, resigning. Many of these executives had served Vitasoy for over 10 years. Among them, Lin Ke and Chen Yuanqing resigned suddenly citing 'personal reasons,' while the specific reasons for the other executives' resignations remain unknown.
According to insiders, the resignations may have been related to issues found by the Hong Kong headquarters' audit team during the review of expense reimbursements in the South China region, but the official details have not been disclosed. Zhu Danpeng believes that changes in senior management may also bring strategic shifts. When the company is preparing to expand northward to layout the national market, Vitasoy's rectification of the South China situation is a beneficial move.
Currently, Vitasoy's production layout in the mainland is mainly in Shenzhen, Shanghai, Foshan, and Wuhan. Even though Vitasoy has a certain market share in Guangdong, Guangxi, and Fujian, its products are still hard to find north of the Yangtze River.
Soy milk has always been Vitasoy's main business in the mainland, and its operations are relatively concentrated. According to Euromonitor market data, in 2016, the overall retail market size of soy milk reached 8.4 billion yuan, with Vitasoy holding approximately 42% of the brand share in China, firmly ranking first in the industry.
Related analyses suggest that as competition in the soy milk industry intensifies, Vitasoy has certain issues in channel management, including chaotic import channel management and high price differentials, leading to overseas products flowing into the mainland. Although the impact of these issues is not yet obvious, if not controlled in time, Vitasoy may face a 'crisis amid prosperity' during its rapid development period.
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