Average Annual Price Increase Of 15.5%&Nbsp; Track The Annual Price Rise Of Foreign Milk Powder.

What is the reason for raising the price of an annual average of 15.5%?

Xinhua News Agency reporter Chen Ji

The news that foreign brands of milk powder will set off a new round of price rises will really make the milk powder Market tense.

According to a press survey, foreign brands claim that the reasons for the rise in prices are no higher than the cost of raw materials, replacement of packaging, upgrading of recipes, etc. but it is not difficult to trace the price rules of foreign milk powder in recent years. From 2006 to 2009, the highest price increase of foreign milk powder was 62%, with an average annual increase of 15.5%. Consumers are questioning the reasonableness of the high price increase, and they are also asking, who is manipulating the annual average price increase of 15.5%?

Individual brand milk powder takes the lead in price rise.

Reporters in Guangzhou city supermarket survey found that individual brands of milk powder has indeed raised the price. For example, Beingmate milk powder has adjusted the price of milk powder from June 1st to 5%, or 10%; Abbott infant formula has increased by an average of about 6% since June.

The Price Inspection Bureau of the Guangdong Price Bureau has found that, in the Huarun Wanjia Wuyang New Town store in Guangzhou, field survey showed that the 4 survey samples of Mead Johnson in April were 1 times in price in the first half of this year, and the increase rates were 4.92%, 10.2%, 10.17% and 9.03% respectively. Abbott 4 survey samples began to raise prices in early June, and the price hikes were 7.69%, 7.39%, 5.92% and 4.97% respectively, while Wyeth and Dumex did not raise prices this year. In the inspection, inspectors feel that the enterprises that did not raise the price before did not mean that they would not raise their prices later.

The main reason for the increase in the price of foreign brand milk powder is that the raw materials, such as base powder and excipients for infant milk powder production this year, and the price of packaging materials, transportation costs and labor costs are all rising. Shi en (Guangzhou) infant milk powder nutrition Co., Ltd. presented a price list of the main raw materials purchased by the company to the inspectors. In April 1st this year, the 1 piece of base powder rose from 19500 yuan to 25500 yuan, or 30.77%, while the 2 base powder rose from 23000 yuan to 39500 yuan, or 28.26%. 3 cubic meters of base powder rose from 24000 yuan to 31000 yuan, or 31000. Due to rising costs, the company's main products will increase by about 5% in the near future.

According to the monitoring report released by the Ministry of Commerce's market operation and regulation department at the end of March this year, there are three factors that affect the rise in the price of dairy products: first, the tight supply of raw milk; two, the rapid growth in consumption of milk powder; and three, the rise in costs. In mid March, the market price of corn and soybean meal increased by 21% and 2.4% respectively. In May and June, with the increase of raw milk output and price reduction, the price of dairy products is expected to stabilize. However, due to the rising cost of dairy farming, packaging and transportation of dairy products and the rising price of imported milk powder, the possibility of domestic dairy prices falling sharply is unlikely.

Is it a cost increase or a price game?

In the case of rising costs, the price rise seems logical, but after many years of tracking the brand milk market, the price increases have become the habit of foreign brands of milk powder merchants. In fact, Mead Johnson, Abbott, Wyeth, Dumex and other foreign brands of infant formula milk every year has increased the price of behavior.

According to the monitoring results of the Guangdong price monitoring center, the highest price increase was 22% in 2006, the highest in 2007, the highest in 2008, and 20% in 2008, and the highest in 2009, 10% in 2007. If calculated according to the maximum price increase, from 2006 to 2009, the highest price increase of foreign milk powder was 62%, with an annual average increase of 15.5%.

The reason why the price of foreign brand milk powder rises every time is nothing more than the increase of comprehensive cost, the replacement of packaging and the upgrading of recipes. But consumers can not help but wonder whether the production cost of milk powder is going up every year. How much intrinsic value can the upgrading of the formula bring to the product? Is the annual average price increase of 15.5% reasonable?

For foreign brands of milk powder repeatedly reported price increases, the domestic dairy experts, Guangdong Dairy Association vice president Wang Dingmian will not recognize the "cost theory". He pointed out that the price of raw milk powder has dropped by several thousand yuan from the end of last year, and the price rise of milk powder has little to do with the cost. At present, the average profit of foreign milk powder market is 50% to 100%.

Insiders pointed out that the deep-seated reasons behind the continuous rise in price of foreign milk powder actually reflected the profound changes in the market structure of China's dairy industry over the past few years. "In the past 10 years, China's milk powder brands accounted for more than 70% of the domestic market, and foreign milk powder brands accounted for only 30%. But after the melamine incident in 2008, some consumers changed to buy foreign milk powder, and foreign countries banned the import of Chinese milk powder. China's large and small dairy enterprises also bought imported raw milk powder such as Australia and New Zealand, and the Chinese dairy industry suffered severe impact. Wang Dingmian pointed out.

At the same time, foreign dairy enterprises have taken advantage of the market and expanded from production to sales to the Chinese market. Many famous foreign brands have set up a nationwide market network in China and manipulated the market by price. Since then, the share of high-end domestic milk powder and imported milk powder has been completely reversed. According to statistics, in China's high-end infant formula market, only the four oceanic brands of Mead Johnson, Abbott, Wyeth and Dumex occupy 60% of the market share. At present, foreign milk powder basically has the right to speak Chinese high-end infant formula.

According to statistics released by Guangzhou customs, from January to April this year, 28 thousand tons of milk powder imported from Guangdong port increased by 41% over the same period last year, worth 89 million 280 thousand US dollars, an increase of 81%. The price volume of imported milk powder is rising, which is reflected in the terminal retail link, which is the price raising effect of milk powder, especially imported milk powder.

Li Youhuan, director of the Industrial Research Institute of Guangdong Academy of Social Sciences, pointed out that using price to control the market is the common practice of multinational companies. Since last year, the price of domestic milk powder market fluctuated greatly, and there was suspicion of foreign capital manipulation. "Especially from last March to May, foreign brands of milk powder were almost" nonsense ". Li Youhuan also pointed out that when China is in a difficult period of curbing inflation, such behavior of price increase or the spread of price increases may lead to the Domino effect of the whole body: the price rise of some kind of product - the price rise of related products - the rise of the industrial chain, and the consequences are quite serious.

Price supervision faces new tasks

Li Youhuan, Wang Dingmian and other industry experts strongly appealed to the behavior of foreign brands of milk powder for a long time, which highlights the lack of supervision of the price operation of multinational companies in the Chinese market. Because many foreign brand products have taken up a large share in the Chinese market, to some extent, they have the pricing power and the right to speak in a certain extent. Their price adjustment has wide spread and great influence, which can easily lead to bad phenomena such as the following trends in the industry such as price increases and market movements.

Liu Guangming, deputy director of Guangdong Price Bureau, believes that the phenomenon of rising price of foreign brands of milk powder has raised a new topic for price supervision. "In view of the inflation expectation and the current situation of the milk powder market, the price department has strengthened the supervision of the current market price of the milk powder."

According to Liu Guangming, in view of the signs of rising price of foreign milk powder, Guangdong Price Bureau has carried out investigation and verification on the price of milk powder, and held a price survey meeting of Chinese and foreign brand milk powder enterprises to understand the real situation and call on enterprises to strengthen self-discipline. At present, infant milk powder and liquid milk have been incorporated into the regular price monitoring catalogue of local price departments, increasing the frequency of sending price monitoring data and reflecting the price changes in a timely manner.

Just because of a series of prompt and decisive government investigation, the price of foreign milk powder has been reasonably suppressed, and there has been no previous trend of increasing prices or buying goods out of stores.