Dairy in Asia: milk and money Cleopatra and Elizabeth I bathed in it. Shakespeare wrote about its wishy-washy gentleness. Now a New Zealand dairy company - Fonterra - wants to build pools of it in China while in Australia, three companies are fighting over it. The interest in milk can be summed up thus: take the more than half of humanity living in Asia, add a growing taste for dairy products, and watch the money rise to the top, like cream. Forget Australia's mining boom; try its dining boom instead. The country is the world's fourth-largest exporter of dairy products. Since Warrnambool Cheese and Butter was first approached by a bidder in September it has attracted two other suitors. WCB's shares have doubled, and trading activity has risen 15-fold. The group now trades on 60 times trailing earnings, making it the most expensive dairy group of any size in the world. To understand the interest, look to Asia, where demand for dairy products has jumped a fifth in seven years. But consumption per head is still at only a quarter of European and US levels, according to the International Dairy Federation. And while consumption in the biggest potential markets - China, Indonesia and India - rose faster than the overall rate, China still consumes less than 40kg per head and demand rose 39 per cent. This explains why Asia is the destination for almost half of the $12bn committed to big-project dairy investment worldwide. Australia and New Zealand have attracted $1.2bn - as much as China, where the likes of Nestlé and Fonterra want to expand. Taking a product, assuming rising demand for it and multiplying by 1.3bn Chinese consumers is a risky game. But China is short of milk and still working to create a safe modern industry. Its cows yield less than Australian or Kiwi herds, too. And, as the fight for WCB shows, there is a shortage of assets to buy. Saputo, a Canadian dairy company, lifted its offer for Warrnambool on Friday by more than a tenth to A$9 a share. That values the target's debt and equity at a stunning 22 times trailing earnings before interest, tax, depreciation and amortisation. There is no milky gentleness about this dairy battle.