Hong Kong’s Industrial History, Part VII: The Rise and Fall of Local Milk

Old habits are hard to break. In the mid-19th century, when British expatriates moved to the recently acquired colony of Hong Kong, they knew they were settling in a part of the world where dairy had never been part of the local diet. But they weren’t ready to give up milk – so they brought their own cows. 

“In the 1850s, expatriate households usually owned at least one cow,” noted journalist Eamonn Fitzpatrick in a 1988 history column for the South China Morning Post. “A block of ice bought from the exclusive distributor George Duddell prevented the milk from rapidly deteriorating in the tropical climate.”

This was not exactly the organic milk from grass-fed cows that expatriates might buy from Great or CitySuper today. According to Nigel Cameron’s 1986 book The Milky Way: The History of Dairy Farm, milk production was limited to the “nauseating dairies of the Chinese slums,” with cattle kept in densely-packed tenement flats, their waste dripping into the apartments below.

Needless to say, the resulting milk was far from hygienic, and when Scottish surgeon Patrick Manson moved to Hong Kong in 1883, he was horrified by the low quality of dairy the local European population consumed. Almost immediately he hatched a plan to establish a proper dairy farm. With the help of five prominent businessmen—Paul Chater, Phineas Ryrie, WH Ray, JB Coughtry and Phineas Ryrie—Manson bought a plot of land in rural Pok Fu Lam and imported a herd of 80 Freisian cows from Scotland. With typical Caledonian forthrightness, Manson named his new company Dairy Farm, and it began producing fresh milk and butter in 1886.

It was not an easy journey at first. The bubonic plague ripped through Hong Kong in 1894, sending the city into chaos, followed by an outbreak of rinderpest that decimated Dairy Farm’s herd. It only managed to survive thanks to a savvy farmhand named Cheuk Yau, who drove 30 healthy cows to shelter as soon as the disease emerged. He died soon after, for unrelated reasons, but Dairy Farm rewarded his widow with cash and hired both of his sons to work for the company.

By then, Manson had already left Hong Kong, though not before he founded a medical school attended by Sun Yat-sen, which was later expanded into the University of Hong Kong. In his place came another Scotsman, James Walker, a professional farmer who was tasked with managing Dairy Farm’s operations.

Dairy was only part of that business. In 1890, Dairy Farm built a cold storage warehouse on Lower Albert Road and began importing frozen meat from Australia, which it sold retail as well as wholesale. It needed plenty of ice to keep its products cold and fresh, so eventually the company merged with the Hong Kong Ice Company, which had been established years earlier by Jardine Matheson, whose co-founder Paul Chater had been an early investor in Dairy Farm. By the mid-1930s, according to industrial historian Hugh Farmer, Dairy Farm ran “the largest and most modern farm in southern China, had a monopoly on ice-making, ran six retail stores and was the largest supplier to ships calling at Hong Kong.”

A milk bar on the Chai Wan Resettlement Estate in 1965. Photo courtesy Ko Tim-keung.

In 1941, Dairy Farm opened a flagship soda fountain in The Lido, a sleek steel and concrete building that overlooked Repulse Bay Beach. But the timing turned out to be unfortunate: Japan invaded Hong Kong not long after and sent most of Dairy Farm’s staff to internment camps, except for those needed to keep the Pok Fu Lam farm up and running. On the eve of the Battle of Hong Kong, there were 1,900 cows at the farm; by the end of the war, only 300 remained, most of them weakened by malnutrition.

The company was one of the first in Hong Kong to resume operations after the war. And for the first time, its dairy business faced competition. In 1940, entrepreneurs George Ahwee and Rudy Choy had established Kowloon Dairy with the goal of supplying milk to the northern part of Kowloon. It expanded after the war, maintaining a farm near present-day Choi Wan Estate, which it moved to Yuen Long in the 1970s. In 1956, the monks of Trappist Haven Monastery on Lantau Island began producing milk. They were joined in 1962 by Hong Ning, another small-scale dairy in the northern New Territories. 

Hong Kong’s dairy industry was expanding to meet unprecedented demand. Before World War II, milk consumption was almost entirely limited to expatriates. And for good reason: studies show that a majority of ethnically Chinese people are lactose intolerant. But postwar nutritionists promoted dairy as a healthy source of protein, and it quickly caught on, popularised by dai pai dong and cha chaan teng that served calorie-rich Chinese-Western fusion cuisine to hungry workers; no bowl of noodles was complete without a cup of unctuous milk tea. Charity organisations also ran milk bars in the estates built to resettle squatter families, giving Hong Kong kids a taste for dairy from an early age.

Evaporated milk was especially popular because it was so affordable, but fresh milk still had plenty of appeal. In Yau Ma Tei, when business at the Tai On Coffee Shop slumped after the cinema next door shut down, owner Chan Kwong-yiu began giving away free bottles of Dairy Farm milk with every breakfast set. “Free milk was the key to restoring our business,” he recalls.  

The dairy farm at Trappist Haven in 1975. Photo courtesy HKU Libraries.

Ironically, just as more and more people were drinking milk, Dairy Farm was starting to move out of the dairy business. In 1960, it launched Dairy Lane, Hong Kong’s first modern supermarket, and two years later it acquired rival chain Wellcome. Then, in 1972, Dairy Farm was acquired by Hongkong Land, another Jardine Matheson company founded by Paul Chater. Its legal base moved to Bermuda. Today, Dairy Farm controls thousands of supermarkets and drug stores across Asia, and it also runs 7-Eleven and IKEA in Hong Kong. 

Dairy Farm’s transformation from a local milk producer to multinational holding company produced some interesting artefacts. The Pok Fu Lam farm was shut down in 1983, leaving behind a century-old senior staff quarters and more modern staff housing built in the 1950s, among other facilities. Some of these are being restored for new uses, but there are plenty of ruins being reclaimed by nature, including stone walls with crossover steps for cowboys. 

In Central, Dairy Farm’s warehouse on Lower Albert Road continued to operate until the 1970s. David Shaw, a former British manager with the company who arrived in 1952, recalls how the building was used for more than just storage. “It also housed a quality control lab to especially monitor the dairy and ice cream products,” he says. There was also a staff recreation room with table tennis and space for Dairy Farm’s sports club to meet. “In November 1952 I remember going from there to Victoria Park to play football for the Dairy Farm team.”

Though the building had become a landmark thanks to its prominent location and striped brick-and-stucco façade, the government decided to demolish it for a new highway-style interchange. But those plans were put on hold, and in 1983, part of the old warehouse was handed over to the Fringe Club, an English-language cultural association, and the other part was leased to the Foreign Correspondents’ Club. Although the building is now listed as a Grade I heritage site, it remains zoned for roadway expansion. 

The Pok Fu Lam dairy farm in 1954

Meanwhile, Hong Kong’s local dairy industry has all but disappeared. There is just one licenced dairy farm remaining, according to the Agriculture, Fisheries and Conservation Department, and it is not clear if it still operates. Even local brands like Kowloon Dairy now import their milk from mainland China, which hasn’t always worked well. In 2015, Trappist Dairy was forced to recall its milk after government tests found it to contain 260 times the legal limit for bacteria. The same year, local media revealed that the supposedly fresh organic milk sold by Hong Ning Dairy was actually made from powdered dairy formula. It turned out that Hong Ning’s farm had lost its operating licence in 2008 and it didn’t even have any cows.

Most of the milk consumed in Hong Kong now comes from abroad, whether it is the Dutch evaporated milk beloved by tea masters, or jet-fresh milk flown in from Hokkaido and sold at extravagant prices. Either way, there is a lot of it: 69 million kilograms of milk were sold in Hong Kong last year, a 20 percent increase over 2010, according to business data firm Statista. 

Call it Manson’s paradox. More than a century after the dairy pioneer arrived in Hong Kong, there is no longer any local milk – and yet dairy has become more popular than ever before.

Correction: A previous version of this article stated that Dairy Farm operates IKEA, 7-Eleven and Starbucks in Hong Kong, Macau, Taiwan and Indonesia. In fact, 7-Eleven and Starbucks in Taiwan are owned by Uni-President, while Starbucks Hong Kong is operated by Maxim’s Caterers, which is partially owned by Dairy Farm. We regret the errors.