Chinese dairy Mengniu has booked a drop in first-half profits.

In the six months to the end of June, net profit slid to CNY747.9m (US$117.7m), compared to CNY892.1m recorded last year. The company blamed the decline on a “surge” in the cost of milk sources and an costs related to employing more quality assurance staff.

Sales in the period, also declined, to CNY18.36bn from CNY18.58m a year earlier. The company cited a slowdown in Chinese dairy industry growth on the decline.