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Price war on milk powder continues

24 Jan 2014 - {{hitsCtrl.values.hits}}

The tug-o-war between milk powder companies and the Consumer Affair Authority (CAA) on the price increase on milk powder is continuing amid allegations that the companies are hoarding milk powder so as to create an artificial shortage in the market.

CAA Chairman Rumy Marzook said though five milk powder manufacturers including Fonterra Brands Lanka and Maliban Milk Products (Pvt) Ltd. had requested for an increase in milk powder prices, the CAA had still not taken a decision on the matter.
He accused the milk powder companies of hoarding milk powder.

“They are attempting to create a milk powder shortage in the country by resorting to such methods,” he said.

Fonterra Brands Lanka said that it had requested the CAA for a price increase because milk powder prices in the world market had risen steeply.

“We have been paying the additional costs resulting from record high global milk powder prices for many months. This is unsustainable for any business.

Therefore, we have been talking with the relevant Government authorities about increasing the retail price to ensure we can meet ongoing demand and supply high quality milk products to Sri Lanka,” the Company said.

When asked about the shortage of milk powder in the local market, it said they were maintaining their sales volumes and continuing to supply milk powder to the local market.

Meanwhile Nestles Lanka said it had so far not requested the authorities for a price increase for their milk powder.

“The global milk powder prices are not affecting us as our products depend on local milk harvests. Therefore we haven’t requested for a price hike for now based on this factor,” Nestles Corporate Affairs Assistance Vice President Bandula Godage said.

He said the Nestle share in the local market is some 16 per cent and remains unchanged.

“We have been supplying 16 per cent to the local market. That will not be sufficient if there is a shortage in the other 84 per cent of products. Therefore consumers tend to panic buying the product what is available,” he said.

However the consumers complained that there is a shortage of milk powder in the local market. (Lahiru Pothmulla)

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Price war on milk powder continues

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