Chapter 581 – Tai Hua Ham
Although CCTV’s had reported on Qiudu and Danhui companies, Henan Province’s leaders were still thinking of ways to save these two companies.
The simplest way to save them was to get a scapegoat to claim full responsibility and divert the people’s attention.
The General Managers of both Qiudu and Danhui Companies were removed. Henan Province had acted fast. Under normal circumstances, this move was enough to appease the consumers. But they did not expect there was someone who was not willing to let this matter go like this.
Zhejiang Newspaper had published a report questioning if the local government was aware that Qiudu Company had used contaminated pork to manufacture their ham. If had not covered this story, will that General Manager Ma still continue to be the person in charge of the company?
This was a serious matter, and only the General Manager had to step down? Was that enough? The Trade and Industrial Bureau and the Health Department were not going to take actions? The company can still continue to operate? Shouldn’t it be suspended for further investigations?
After this newspaper published this report, the local papers in various provinces also published similar stories. They started to question the Trade and Industrial Bureau and the Health Department on their actions and questioned the food safety of some other enterprises.
But no matter what other enterprises the newspapers questioned, their attitude towards Qiudu and Danhui were the same. These companies should be suspended and punished severely!
The reporter from CCTV had arrived again to find out about the aftermath of this Qiudu Company. The Provincial Government had no choice but to do something. Since this matter had blown out of their control, The Provincial Government suspends Qiudu Company for investigation.
If this were a private enterprise, the local government would take action immediately. But state-owned enterprises were considered their own people. They usually will not melt out harsh punishment to them. Now, everyone was watching them. There was no way the local government could cover up this matter or take sides. If they did not act on this matter fast, they might even get into trouble themselves.
Qiudu Company was suspended, and everyone from the workers to the leaders was investigated. Even one of the City’s Deputy Mayor was implicated and forced to retire. He was only in his 40s.
Qiudu Company was finished. But Danhui Company was not far away too. The newspapers started to focus their attention on Danhui Company. Why was the General Manager of an enterprise, which spread malicious rumors and widespread fears, the only person that was removed from the position? Are there no one else that was involved?
The mastermind was punished, but what about the accomplices? Shouldn’t they be punished too? Danhui was the only set up two years ago. How did they develop so fast? Did they use the same methods in the past?
It was against the law to spread rumors. Shouldn’t the local Police step in? Because of the rumors they spread, they had earned some profits. Shouldn’t that money be confiscated?
The newspaper agencies of several provinces dig up the past of Danhui. There were reports that some packets of their ham had insufficient ham in it. Some of their products were expired before the expiry dates. There were also reports that the percentages of the ingredients do not match their labels.
The distributors were smart. They saw that Danhui Ham was in trouble and they refuse to sell their products. There were still many ham manufacturers in China. They do not need to sell Danhui ham.
In the past, Danhui was considered a well-known brand, and it tastes good. Furthermore, the consumers were not going to buy Qiudu’s products and the distributors immediately switch to Danhui. But now, it was apparent Danhui Company was finished too. Why should the distributors help them? Their cooperation had only just started and were not close to each other.
Now, no consumers were willing to buy Danhui’s products too, and Danhui’s General Manager was taken to task. The company should also be finish.
The other ham companies were all in a good mood. This was the opportunity for them to rise to the top. One month ago, the Ham market was controlled by Qiudu. Then Qiudu collapsed, and Danhui took over as the market leader.
But now, Danhui was in trouble too. It might be these companies’ turn to be the market leader!
However, a new commercial appeared on CCTV, and the hearts of the ham companies sank.
“Tai Hua Ham, made from premium Tian Peng Pork. Quality meat, Safe meat. Suitable for all ages. Nationwide Quality Supervision. Call XXXX-XXXXXX.”
Where did this Tai Hua Ham come out from? How come they are working with the popular Tian Peng Pig farm? Their ham was made from Tian Peng Pigs? Then their cost should be much higher.
But the ham companies soon noticed that Tai Hua Ham’s retail price was the same as Qiudu. They did not increase their rates at all. This means that the profits of Tai Hua Ham were lesser than Qiudu Ham. But the ham manufacturers knew the cost of one piece of ham. The cost will not be more than 40 cents, and the retail price was 70 cents. Even if the wholesale price was the same as before, at about 50 cents, the profits should be about 25%.
Now, the earnings of Tai Hua Agricultural products, the distributors and the retailers were about 10 cents each. But the cost of Tai Hua Agricultural Products Company was the lowest and had the highest profits.
At first, Zhang Ming wanted to increase the wholesales and retail prices by 10 cents. He had spent a lot on advertising and had used Tian Peng Pigs as the raw ingredients. This had increased its cost. He analyzed and found out that there was not much difference to their total sales volume even when the retail price was set at 80 cents.
But Feng Yu stopped him and told him that this was not the time yet. They should focus on building their brand first. The consumers must be used to eating and like Tai Hua Ham. After that, they will increase the prices.
The profits might not be high now, but their sales volume will increase. After Tai Hua Supermarkets were in operation, the sales of Tai Hua Ham will increase further.
At that time, Tai Hua Ham will be a household brand.
Feng Yu reminded Zhang Ming again to monitor the quality of Tai Hua Ham closely. Especially the percentage of meat in the ham. It must now be lowered. Although the starch used in the ham was cheap, if too much starch were used, the taste would not be good. Feng Yu wants the consumers to acknowledge Tai Hua Ham and thinks this was the best ham in China!
In Feng Yu’s previous life, some companies tried to lower their cost and reduce the percentage of meat in the ham. With lower cost, these companies were able to reduce their retail prices and gain more market share.
But in the end, these companies were unable to increase their market shares, and the consumers felt their ham were the worst ham. Their brands’ reputation was affected severely.
Feng Yu’s goal was to let Tai Hua Ham replace the former Qiudu Ham and become the industry standard. With Tian Peng Pigs becoming the pork industry’s benchmark, he will be able to take over China’s pork related industry.
In Feng Yu’s previous life, the frozen meat market was very popular. Several big brands were competing for the market share, and it was the Danhui Company that emerges as the final winner. Danhui Company later became the world’s biggest frozen meat company. Not to mention their meat related products, just the frozen meat alone had created more than 1 billion RMB of profits annually.
But from this moment on, all these belong to Tai Hua Agricultural Products Company. Tai Hua Frozen meat will appear all over China soon. But first, Tai Hua Frozen meat should be sold in exclusive counters inside Tai Hua Supermarkets.