Inner Mongolia’s Mengniu Milk Company’s 2007 said Tuesday that its 2007 sales were up 31.2% year-on-year to US$3.045 billion (RMB21.318 billion), China Business Net reported. It earned more than its key competitors, including Inner Mongolia’s Yili, which earned US$2.37 billion (RMB19.36billion), and Shanghai’s Brightness, which earned US$1.17 billion (RMB8.206 billion) over the period. Its success has been attributed to good use of marketing channels; Mengniu won contracts with both Starbucks and KFC last year. Wang Dingmian, a spokesperson for the Dairy Association of China, said Mengniu had advantages in yoghurt and lactobacillus drinks and Yili had strength in milk powder. He expected both would continue growing, but that growth would slow. A senior analyst told the paper that Yili lagged Mengniu because its tax burden forced it to cut its marketing budget. It paid US$162 million (RMB1.13 billion) in customs duty in 2007.

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