This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

How to Invest in China's Food Safety Progress

BEIJING ( TheStreet) -- An odd fact of life in modern China is that shopping at a supermarket for a carton of milk is often a stressful experience.

Consumer confidence in dairy products has been extremely shaky ever since toxic plasticizers contaminated baby milk powder in 2008. At least six children died and about 300,000 were sickened.

The dairy sector was quickly overhauled. But today wary shoppers still sweat over whether to buy a Chinese milk brand, or pay twice as much for one of the many imported brands on store shelves shipped from as far as New Zealand and Germany.

Will shoppers in China ever again feel comfortable with domestic dairy? More to the point, will China ever get a handle on its broader and well-known struggles with food-safety issues?

Investors who think the answer to both questions is "yes" see opportunities amid positive changes for the Chinese food industry. Behind these changes are technological developments, entrepreneurship and government initiatives. Competitive pressure from imported food has been an added incentive for progress.

Food suppliers with exceptional track records as well as the makers of special kinds of food-testing and processing equipment are among the companies in China recommended by stock analysts in recent weeks. Another way to bet on the country's food-safety developments is to buy global retailers such as Walmart (WMT - Get Report) and France's Carrefour (CRRFY) whose Chinese grocery aisles attract shoppers searching for food they can trust.

Carrefour was the standout corporate sponsor at a major food security meeting recently held in Beijing and organized by government agencies from France and China. Topics on the table included a new food safety law drafted by the Chinese cabinet, the State Council, which could be enacted soon.

Last year, France and China agreed to cooperate on a project aimed at improving food safety and ingredient tracing in China, from farm to kitchen. France's successful tracking system will serve as a model. This and related industry oversight projects are expected to put more government inspectors in the field at slaughterhouses, dairies, food processing plants and fish farms.

China's contaminated food problems have long had nationwide as well as global implications. Chicken scares in the past have hit sales at KFC outlets nationwide, which are owned by Yum! Brands (YUM). And pet stores in the United States have been stung by tainted doggie treats imported from China.

On the other hand, food safety problems have created demand in China for testing equipment made by foreign companies such as Agilent Technologies (A - Get Report) and Thermo Fisher Scientific (TMO). Multinational players in this field have several up-and-coming competitors in China such as Skyray Instruments and Centre Testing International (CTI), which are listed on the Shenzhen exchange.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
A $41.11 0.00%
WMT $81.35 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs