Core Insights - The dairy industry is facing increasing survival pressures, with major players like Mengniu and Yili needing to collaborate to reshape the industry landscape [3][8] - The average price of fresh milk in Q2 this year was only 3.04 yuan/kg, significantly below the breakeven point of 3.5 yuan/kg for most farms, leading to over 90% of dairy farms operating at a loss [3][8] Company Strategies - Mengniu's premium product, "Te Long Su," has achieved sales exceeding 30 billion yuan, becoming the largest single product in the global dairy industry, while also launching a new "desert organic" product [5][8] - Yili's "Jindian" focuses on creating a high-end image through organic branding but lacks a clear connection between organic and source quality, which may limit its competitive edge [5][8] Market Trends - The dairy market is characterized by a dominance of liquid milk, with 92.7% of total dairy production in China being liquid milk, while deep-processed products like cheese and butter account for less than 7.3% [8][9] - The B2B dairy market has expanded to a scale of hundreds of billions, with significant demand for dairy products from coffee chains like Starbucks and Luckin Coffee [9] Competitive Landscape - Both Mengniu and Yili have faced challenges with product packaging similarities, leading to consumer confusion, but Mengniu has chosen to focus on its development strategy rather than legal disputes [6][7] - The overall dairy consumption has declined, with a 9.6% drop in sales across all channels, prompting companies to shift focus towards product quality and pricing [7][8]

Core Viewpoint - The Jiangsu Provincial High People's Court ruled in favor of Yili in a case against Mengniu for unfair competition, ordering Mengniu to cease its infringing activities and pay Yili 5 million yuan in damages due to the similarity in packaging between Mengniu's "Selected Pasture" milk and Yili's "Jindian" milk [1][4][5]. Group 1: Legal Dispute and Court Ruling - The court found that Mengniu's "Selected Pasture" milk packaging closely resembled Yili's "Jindian" packaging, constituting unfair competition [1][6]. - This ruling adds to a history of legal defeats for Mengniu in similar packaging disputes, with total compensation to Yili exceeding 8 million yuan [4][5]. - A survey indicated that 82.6% of respondents believed the packaging of the two products was similar, supporting the court's decision on consumer confusion [8]. Group 2: Market Position and Brand Strategy - Yili's "Jindian" brand has achieved significant market success, surpassing 20 billion yuan in annual sales by the end of 2021, and continues to lead in market share within the high-end milk category [6][11]. - Mengniu's "Selected Pasture" was launched in 2014 as a digital traceable product, aiming to compete directly with Yili's high-end offerings [5][9]. - The competition between Yili and Mengniu reflects a broader struggle for market share in the premium milk segment, with both brands targeting similar consumer demographics and pricing strategies [9][11]. Group 3: Financial Performance and Growth Challenges - In the first half of the year, Yili reported revenue of 61.933 billion yuan, a year-on-year increase of 3.37%, while Mengniu's revenue fell to 41.567 billion yuan, a decline of 6.95% [11][12]. - Yili's profit margins are significantly higher, with net profit exceeding 72 million yuan compared to Mengniu's 20.46 million yuan, highlighting a growing disparity between the two companies [11][12]. - Mengniu faces challenges in establishing a second growth curve, as its core product growth slows and it struggles to innovate beyond packaging changes [12].

Core Points - The recent court ruling in the unfair competition dispute between China's dairy giants Yili and Mengniu has concluded, with the Jiangsu Provincial High Court upholding the original judgment, ordering Mengniu to cease its unfair competition practices and compensate Yili 5 million yuan [1][4]. Summary by Sections Legal Dispute - The case primarily revolves around the packaging design similarities between Yili's "Jindian" pure milk and Mengniu's "Selected Pasture" pure milk, which Yili claims constitutes substantial imitation [3][4]. - Yili upgraded the packaging of "Jindian" in 2020, establishing a high-end brand image, while Mengniu's similar packaging was launched in late 2023, leading to Yili's lawsuit in May 2024 [3][4]. Court Findings - The court ruled that while individual elements like green, pastures, and cows are common in the industry, the unique combination of these elements in Yili's packaging is legally protected [4]. - The court noted that Mengniu's failure to prominently display its well-known brand name further increased the likelihood of consumer confusion [4]. Financial Impact - The court ordered Mengniu to pay Yili a total of 5 million yuan for economic losses and reasonable expenses incurred to stop the infringement, while rejecting Yili's request for a public statement to mitigate the impact [4]. - Yili's "Jindian" pure milk sales from 2021 to mid-2024 totaled 6.458 billion yuan, with a market share of 11.33%, compared to Mengniu's 0.13% for "Selected Pasture" during the same period [5]. Industry Context - Both Yili and Mengniu are leading players in China's dairy industry, with Yili reporting a revenue of 61.777 billion yuan in the first half of 2025, a 3.49% increase year-on-year, while Mengniu's revenue was 41.567 billion yuan, a 6.9% decline [5]. - The ruling sends a strong message about the importance of brand, quality, and innovation in market competition, emphasizing the need for companies to protect their innovative achievements and adhere to competitive regulations [5].

Core Viewpoint - The recent legal dispute between two major players in the dairy industry, Yili and Mengniu, has concluded with a court ruling against Mengniu for unfair competition related to packaging similarities [1][4]. Group 1: Legal Dispute Details - The Jiangsu Provincial High Court upheld the lower court's decision, ordering Mengniu to cease its unfair competition practices and to compensate Yili 5 million yuan for economic losses and reasonable expenses [1][4]. - The dispute centers around the packaging design of Yili's "Jindian" pure milk, which underwent a significant upgrade in 2020, establishing a distinctive visual style that includes a white base with dark green borders and illustrations of pastoral elements [3][4]. - Yili accused Mengniu of substantial imitation with its "Selected Pasture" pure milk packaging launched in late 2023, claiming it could confuse consumers due to the high similarity in design [3][4]. Group 2: Court Findings - The court rejected Mengniu's defense arguments, stating that while individual elements may be common in the industry, the unique combination of these elements in Yili's packaging is legally protected [4]. - The court noted that Mengniu's failure to prominently display its well-known "Mengniu" trademark on the packaging further contributed to potential consumer confusion [4]. - Evidence of actual consumer confusion was presented, including erroneous reviews on e-commerce platforms and market survey reports, leading to the court's conclusion of unfair competition [4]. Group 3: Financial Implications and Market Context - The court's ruling included a compensation amount of 5 million yuan, which, while not financially devastating for either company, sends a strong message about the importance of brand integrity and innovation in market competition [5]. - Yili's "Jindian" pure milk reported total sales of 6.458 billion yuan from 2021 to mid-2024, with a market share of 11.33% from May 2023 to May 2024, while Mengniu's "Selected Pasture" had a mere 0.13% market share during the same period [5]. - In the first half of 2025, Yili achieved revenue of 61.777 billion yuan, a year-on-year increase of 3.49%, while Mengniu's revenue was 41.567 billion yuan, reflecting a decline of 6.9% [5].

Core Viewpoint - The recent legal dispute between two major players in the dairy industry, Yili and Mengniu, highlights the importance of brand differentiation and innovation over mere imitation in market competition [1][6]. Summary by Sections Legal Dispute - The Jiangsu Provincial High Court upheld the ruling against Mengniu for unfair competition, ordering it to cease its infringing activities and to compensate Yili with 5 million yuan [1][5]. - The case centered around the packaging design of Yili's "Jindian" pure milk, which was upgraded in 2020, establishing a distinctive brand image [3][4]. Packaging Comparison - Yili claimed that Mengniu's "Selected Pasture" pure milk, launched in late 2023, closely mimicked the packaging of "Jindian," leading to consumer confusion [4]. - The court found that while individual elements like green color and pastoral imagery are common in the industry, the overall visual effect created by their combination is legally protected [4][5]. Sales Data - Yili's "Jindian" pure milk generated total sales of 6.458 billion yuan from 2021 to mid-2024, with a market share of 11.33% from May 2023 to May 2024 [5]. - In contrast, Mengniu's "Selected Pasture" had a significantly lower market share of 0.13% during the same period [5]. Financial Performance - For the first half of 2025, Yili reported revenues of 61.777 billion yuan, a year-on-year increase of 3.49%, while Mengniu's revenues fell to 41.567 billion yuan, a decline of 6.9% [6]. - The financial impact of the 5 million yuan compensation is minimal for both companies, but the ruling emphasizes the need for competition based on brand and innovation rather than imitation [6].

Core Viewpoint - The final ruling in the unfair competition dispute between dairy giants Yili and Mengniu has been issued, with the court ordering Mengniu to cease its infringing activities and pay Yili 5 million yuan in damages [1][4]. Group 1: Legal Proceedings - The Jiangsu High Court upheld the original ruling, requiring Mengniu to stop using packaging similar to Yili's "Jindian" brand, which was found to cause consumer confusion [1][4]. - The court determined that the packaging and decoration of Yili's products had gained market recognition and influence, distinguishing them from Mengniu's "Selected Pasture" product [3][4]. - This is not the first time Mengniu has been found guilty of unfair competition against Yili, with a previous case in 2017 resulting in a similar ruling [4]. Group 2: Financial Performance - For the first half of 2025, Mengniu reported a revenue decline of 6.95% to 41.567 billion yuan, with a net profit drop of 16.37% to 2.046 billion yuan [5]. - In contrast, Yili's revenue increased by 3.37% to 61.933 billion yuan, although its net profit decreased by 4.39% to 7.2 billion yuan [5]. - The competitive landscape between the two dairy giants may shift due to Mengniu's declining performance and recent legal setbacks [5].