About 5,000 food companies in Beijing will be forced out of business during the next ten years, according to the Beijing Food Industry Association.

Increasing competition from foreign competitors is blamed for the pessimistic predictions, together with the fact that without expending operations, local manufacturers produce goods of poorer quality and with poorer packaging than their foreign rivals.

Retail sales for local manufacturers should double by 2010, reaching ¥100bn according to the Association's report, but they are seen as unable to cope with foreign competition. Currently, about half of Beijing's food sales are those of western foods such as milk, confectionary and ice cream.