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Dairy firms piggyback on ‘expensive-is-best’ notion
Taking what some experts say is undue advantage of a mother’s readiness to pay more for quality products, powdered milk prices are being priced even higher despite decreasing costs of raw material imports.
The general perception among the Vietnamese people that “the most expensive milk is the best” also plays into the hands of dairy companies, they add.
The price of raw materials imported from Australia and Europe has decreased by over US$250 per ton compared to last month and by more than $1,100 per ton year-on-year.
Imports from Australia and Europe now cost $3,100-3,500 per ton and $3,100-3,250 per ton respectively.
The Dutch Lady Vietnam Company, meanwhile, raised prices on some of its products early this month by 8-10 percent.
For example, its Friso Gold 1 has gone up by VND15,500 ($0.95) per 400-gram can from VND173,000 ($10.64) on July 1. A 900-gram can, meanwhile, costs VND346,500 ($21.3), an increase of VND31,500 ($1.94).
The situation is the same for other brands of the company, like Friso Gold 2, 3, 4 and Friso Mum.
Truong Van Toan, head of Dutch Lady Vietnam’s legal and external relations department, says this month’s price increase is actually the second stage of the company’s plan to adjust prices. The first stage was conducted on July 1.
Dutch-owned Vietnam Nutrition Joint-stock Co. (Dumex Vietnam),meanwhile, has increased its prices by 4 to 5 percent while introducing new designs.
The US-owned Abbott dairy company has raised prices by 10 to 15 percent when launching new products supplemented with more nutriment.
This year, powdered milk prices have increased three times.
Dairy companies then attributed the price hikes to the fact that most of their products were imported from abroad where labor and raw material costs were denominated in American or European currencies much stronger than the Vietnamese dong.
Milk price in Vietnam is now $0.82 per kilogram, compared to $0.4 in East Europe and South America; and $0.8 in China, North America and Oceania, FTA Market Research Company Executive Director Tran Ngoc Dung told a conference on milk held in Ho Chi Minh City last month.
Most mothers with two- to four-year-old children say they are willing to spend 50 percent of their income on buying the best milk brands for their children, local Nguoi Lao Dong newspaper recently quoted an FTA survey as saying.
Dung affirms that Vietnamese consumers tend to favor foreign and expensive brands.
Thanhnien
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