January 3, 2023
Dairy companies in Saudi Arabia raise prices by up to 33%
Many Dairy companies in Saudi Arabia have increased prices of their products by up to 33% effective January 1, 2023, Saudi Gazette reported.
The Saudi dairy giant Almarai Company attributed the price increase to higher shipping costs, increased production ingredient costs, and higher fodder prices. Almarai said these factors resulted in a significant increase in production costs.
The rate of increase in prices for the end user was approximately 33% on some products, as prices of products previously sold at SAR 1.5 (~US$0.40; SAR 1 = US$0.27) rose to SAR 2 (~US$0.53), and the increases included almost all consumer dairy products.
The increase in dairy product prices comes at a time when some companies' profits exceeded SAR 1 billion (~US$266 million) in the first nine months of 2022.
The profits of a dairy company listed on the Saudi Stock Exchange (Tadawul) amounted to more than SAR 1.4 billion (~US$372 million) during the first nine months of 2022, with an average daily profit of SAR 5.2 million (~US$1.3 million), while the profits of another listed company amounted to about SAR 70.4 million (~US$18.7 million) during the same period, with an average daily profit of SAR 261,000 (~US$69,000).
Consumers demanded Saudi Arabia's Ministry of Commerce's intervention, just as they did 11 years ago after a dairy company raised its prices. The ministry was forced by consumer demand to order the company to reinstate the previous selling prices for some of its products.
This came after the company raised the prices of some of its products earlier in the local market and was done in light of the stability of prices of a number of dairy products, similar to the commodities available there.
The ministry said that this was done in accordance with the law, keeping an eye on markets and sales centres throughout the country in order to prevent price gouging and manipulation.
- Saudi Gazette