China’s cherry sales suffer ‘devastating blow’ after reports of coronavirus contamination scare consumers

Su-Lin Tan
·6-min read

Reports that some imported cherries tested positive for traces of the coronavirus last week swiftly sent shock waves across Chinese social media, scaring customers and hurting cherry sales during the peak season ahead of the Lunar New Year.

New information circulating online – that cherries have since tested negative for coronavirus contamination – appears to have done little to placate customers and quell the cherry crisis in China.

The Centre for Disease Control and Prevention in Liangxi district, Wuxi, in eastern China’s Jiangsu province, issued a circular on January 21 saying that tests on imported cherries in late December revealed coronavirus contamination. This set off alarm bells across the country just a few weeks before the holiday period when cherries are commonly given as gifts in China as a symbol of wealth and prosperity.

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Cherry sales have been sent into a tailspin, and Chilean authorities have sprung into damage-control mode to protect one of the country’s vital exports, even though the origin of the contaminated cherries was not disclosed.

“It’s a devastating blow to the entire industry,” a wholesale agent in Guangzhou’s Jiangnan wholesale market said.

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And news of the contamination has hurt not only sales of cherries, but all manner of fruits.

Importers in China said cherry and fruit sales have stalled, and prices have plummeted. Customers are said to be lowballing Chilean cherry vendors, offering to pay as little as 80 yuan (US$12.36) for 5kg boxes priced between 160 and 300 yuan.

Chile is the top cherry exporter in the world, according to market intelligence group Tridge. And nearly 90 per cent of the country’s cherries end up in China. The impact on other popular cherry imports, including from Australia, New Zealand and Canada, has been relatively minimal.

Chilean sales are said to have suffered the biggest hit amid a social media savaging in recent days.

The crisis also highlights how the world’s soon-to-be-largest consumer market can rapidly make or break exports and sales, particularly through its powerful and ubiquitous social media networks. It also underpins a strong shift in Chinese consumer sentiment towards healthy foods, and an increasing intolerance for unsafe food imports amid the pandemic.

This has caused a critical situation … At the retail level, [cherry] sales fell 63 per cent compared with the previous week

Chilean authorities

Chilean authorities, who have resorted to issuing daily updates to tell customers that Chilean cherries are safe, said on Monday that 200,000 articles had been posted online since January 21, resulting in 2.7 billion impressions. And many comments warned against eating imported food.

“This has caused a critical situation in the commercialisation of cherries in wholesale markets [in China],” the Chilean authorities said. “At the retail level, sales fell 63 per cent compared with the previous week.”

The crisis even prompted state broadcaster CCTV to dispel some concerns about the contamination, and the deputy director of the China Centre for Disease Control, Feng Zijian, said coronavirus contamination on fruit was not necessarily infectious.

But as parts of China face new coronavirus outbreaks and the government is urging people not to travel for the Lunar New Year holiday, many Chinese consumers remain wary.

In response, the Chilean government has also formed an action group – comprising its foreign affairs department, its ambassador to China, and export, growers and cherry associations – to work with Chinese authorities to restore consumer confidence through new promotions and advertisements.

After spending US$1.5 million on a new online sales campaign to reinforce the safety of cherry consumption and to emphasise the rigorous quality standards exported cherries must adhere to, turnover has improved slightly but prices remain subdued, Chilean authorities said on Tuesday.

The slight improvement has been helped by some online users reminding consumers that subsequent tests of imported foods in Wuxi came back without any trace of contamination.

Given the fruit’s popularity during Lunar New Year festivities, the term “cherry freedom” gained prominence in recent years as a way to gauge wealth levels in China, by reflecting how easily people can purchase pricey imported cherries without a second thought.

On Tuesday, the Chinese Ministry of Foreign Affairs told the Post that China remained open to food imports, but reiterated that heightened pandemic prevention measures and controls at the border remain paramount.

More than three-quarters of all [Chinese] generations surveyed said online reviews were among the top-three sources of influence when making a purchase decision

McKinsey consumer report

The cherry crisis is evidence of how the pandemic has precipitated new shifts in Chinese consumer sentiment that should put retailers on alert, according to a special 2021 Chinese consumer report by consulting firm McKinsey.

“The epidemic has increased awareness of product safety and quality, and this trend is expected to continue,” the report said.

“Consumers have over-indexed on healthy products,” it added. “Around 75 per cent of consumers demonstrated a strong preference to exercise more and eat healthily post-crisis.

“More than three-quarters of all generations surveyed said online reviews were among the top-three sources of influence when making a purchase decision … On the other hand, traditional word of mouth, or listening to friends and family offline, is waning in importance as a source of influence among young people.”

This health-conscious trend was precluded even before the current cherry crisis. Countries such as Ecuador, Indonesia, Australia and some European countries were among those whose exports of meat and seafood were shut out from China over claims of coronavirus-packaging contamination in the past year.

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Chile, which recently approved the use of China’s Sinovac coronavirus vaccine, now finds itself urgently trying to reverse the impact of the contamination scare, but one importer said “fear does not go away overnight, it will take time”.

For Australia, which is suffering from a trade conflict with China amid political tensions, its cherries have remained relatively unharmed in the current cherry crisis, although its fruits came under fire this month when a report by the Chinese state-run Global Times newspaper said Australian cherries had lost market share in China due to their inferior quality.

In response to the current cherry crisis, a spokesman from Australia’s department of agriculture said that while they had not received any confirmation on the source of contaminated cherries, “demand for Australian cherries remains strong and Australian growers have continued to grow and pack cherries specifically for the Chinese market”.

In the current 2020-21 cherry season, Chile has exported over 300,000 tonnes of cherries, while Australia has sent about 1,500 tonnes. Chile is the top exporter of cherries to China, accounting for about 60 per cent of its total imports, while Australian cherries make up 1 per cent, according to Tridge.

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