Fonterra boss Theo Spierings wasn't mincing his words this week when asked about rival Synlait Milk's moves to sell cut-price infant formula in China.
In partnership with Chinese firm New Hope Nutritional Foods, Synlait's strategy is to eliminate the middle men and sell baby milk online for much less than what consumers in that country usually pay for imported brands.
"Those developments are absolutely the wrong developments," Spierings told the China Business Summit on Monday.
One 900g can of Akarola-branded formula, produced by Synlait, reportedly sells for less than 100 RMB ($24). To compare, a 900g can of Fonterra's Anmum brand sells in China for 288 RMB ($67).
At the summit, Spierings went on to suggest Synlait's Akarola play undermined New Zealand's premium brand image in the Chinese infant formula market, which Fonterra has projected to almost double in size, to $33 billion, by 2017.
"I can't tell competitors what to do and what not to do but it's not doing us any favours as a country."
It will be interesting to watch how Synlait's strategy pans out, as Chinese parents are probably paying an unfair premium for imported formula products.
Success will require convincing consumers that just because a product is cheaper doesn't necessarily mean it's of inferior quality.
Comvita sure did shareholders a favour when it fought off a takeover attempt in 2011. During Singapore-based Cerebos Pacific's buyout bid, Comvita chairman Neil Craig said the $2.50-a-share offer undervalued the New Zealand firm "by a considerable margin".
In retrospect, that comment was right on. Shares in the honey and natural health products firm hit an intra-day record of $8.35 yesterday. That followed Tuesday's upbeat half-year result, which included a big upgrade of annual profit guidance and a 52 per cent lift in half-year revenue, to $91.1 million.
The company reported a $3 million profit for the six months to September 30 compared with a $3.3 million loss a year earlier.
While Cerebos' offer valued Comvita at $71.6 million, the Te Puke-based firm had a market capitalisation of $315 million yesterday afternoon.
Its shares, which have more than doubled in value this year, closed up 3.6 per cent at $8.29 last night.
On the crest
Comvita is riding a transtasman wave of investor enthusiasm for the natural health products sector.
As noted in Stock Takes last week, Australian health supplements maker Blackmores became the first S&P/ASX 200 stock to cross the A$200 threshold last month.
Meanwhile, Vitaco Holdings - which is responsible for brands including Healtheries, Nutra-Life and Balance Sport Nutrition - has had a strong run since listing on the ASX in September.
Vitaco shares opened at $3.08 yesterday, 46 per cent above the A$2.10 offer price.
High levels of demand out of China - including from Chinese tourists spending up large on such products while visiting Australasia - has been stoking investor support for stocks in the sector.
Comvita reported a 53 per cent lift in half-year sales in Asia, to $30.3 million.
Dismantling the Brics
The Bric era is coming to a close at Goldman Sachs, 14 years after the bank coined the acronym that sparked much investment hype about Brazil, Russia, India and China.
Goldman has closed its poorly-performing Bric fund, which invested in those four markets, and merged it with a broader emerging market fund, Bloomberg reported this week.
The fund's assets had reportedly fallen to US$98 million ($149 million) at the end of September after peaking at US$842 million in 2010. Former Goldman economist Jim O'Neill came up with the Bric acronym - which was later expanded to include South Africa - in 2001. An investment boom followed, but the emerging market giants have since fallen on hard times. Russia and Brazil are in recession, while uncertainty surrounds the outlook for the Chinese economy amid a slowdown that is unsettling financial markets worldwide.
Acronym-based investing has, meanwhile, lost some of its allure with investors.
Kurt Umbarger, a global equities specialist with US fund manager T. Rowe Price, said during a visit to Auckland last week that his firm saw bigger opportunities in "peripheral" emerging markets including Peru, the Philippines and Indonesia.
"We don't think the Brics are necessarily the future any more."