General Mills has agreed to sell its Häagen-Dazs shop business in mainland China to an investor group led by fast-growing tea chain operator Ningji, with the deal expected to close this year as the US food company sharpens its focus on higher-growth channels in a market where foreign consumer brands face mounting competitive pressure.

The transaction will give the buyer group an exclusive licence to operate Häagen-Dazs ice cream shops and the brand’s gifting business in mainland China, while General Mills retains ownership of and will continue to operate its retail and foodservice businesses outside the shop network in the country. Financial terms were not disclosed.

The sale covers around 170 Häagen-Dazs stores in mainland China, down from a peak of about 400 outlets. The brand, which entered China in 1996, became a symbol of premium Western consumer goods but has struggled against increasingly sophisticated domestic competitors.

General Mills said the transaction “elevates the company’s focus on its brands and channels that provide the strongest opportunities for profitable growth”. The company added that nearly one-third of its net sales base has changed through acquisitions and disposals since fiscal 2018 as it reshapes its portfolio.

Ningji, founded by Amanda Wang in 2020, operates more than 3,000 tea shops across China and Southeast Asia and has expanded into the United States under the Bobobaba brand. The acquisition marks another step in the growing trend of local operators taking control of well-known foreign consumer brands in China.

Recent transactions have included Starbucks selling a 60 per cent stake in its China business to Boyu Capital and Burger King selling an 83 per cent stake in its China operations to private equity firm CPE. Those deals have reflected intense domestic competition and weaker consumer demand in the world's second-largest economy.

Jessica Gleeson, chief executive of consultancy Brighter Beauty and a former Starbucks executive in China, told the Financial Times that Häagen-Dazs lost ground because “I just don’t think they innovated”. She added: “When it launched . . . there weren’t a lot of premium ice creams out there in the market.”

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