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Dairy Makers To Hike Milk Price

30 December 2011

CHINA - China's three biggest dairy companies including Sanyuan, Yili and Mengniu brands will raise the prices of some dairy products, the Beijing News reports.

Starting from January 1, 2012, the Sanyuan Company is set to raise prices of its nine products, by one to two per cent.

Supermarkets in Beijing also received written notice on price hike from Yili and Mengniu.

Supervisors from Sanyuan and Yili told the newspaper that they had to increase the price due to the increasing costs of raw materials.

However, dairy expert Wang Dingmian disagreed with the statement because recently the price of raw milk has been rising slowly while the prices of raw materials such as white sugar and packaging materials have actually been decreasing.

The report said this year's price hike by the well-known dairy companies doesn't follow tradition because in previous years, dairy companies in China often had sales to increase dairy consumption for New Year's Day and Spring Festival.

Mr Wang noted that the price hike mainly comes from pressure within the companies.

"This year China's dairy companies have faced many negative incidents. For example, in April 251 primary school students in northwest China's Shaanxi Province fell ill after drinking Mengniu's milk at breakfast. Then all of the dairy companies had to invest in order to prevent negative effects. In addition, the dairy companies spent more on advertising. Meanwhile, the price hike is the dairy companies' marketing strategy under the fierce competition to fulfill their company goals in 2011." Mr Wang explained.

TheCattleSite News Desk



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