December 30, 2011

Starting next year, the Chinese capital of Beijing will likely see a price hike of liquid milk from major milk producers including the Inner Mongolian Yili Industrial Group, Mengniu Dairy and Sanyuan Food, according to a media report on Thursday (Dec 29).

An official with Mengniu said the company had not issued any official price hike notice. But he added that the company had no plan to increase the prices in most areas of the country and the price hike would not cover all the company's products.

An official with Yili confirmed the price hike move, but did not say which kind of products would be covered by the price rise and how much the increase would be.

He noted that price of the liquid milk in Beijing would see a slight rise due to the rising cost of raw materials but the company currently had no plans for a price adjustment in other regions.

Sanyuan Food also confirmed the move to increase its products' prices, but said the price rise was only confined to nine kinds of normal temperature milk products. In addition, the company will increase the milk home delivery price from January 1, 2012.

Besides the rising prices of raw materials, logistics costs and labour cost were also increasing. Compared with other similar products, prices of Sanyuan's products were relatively low, company's official said.