Sat, July 09, 2011
Business > Industries

Imported formula milk sees price hike

2011-07-09 10:51:53 GMT2011-07-09 18:51:53(Beijing Time)  China Daily

BEIJING - The price of imported infant formula milk continues to surge, putting pressure on families.

In the past two week, the price of a 900 gram container of ABT Formula I milk powder in Beijing has risen to 261 yuan ($40) from 236 yuan. The increase of almost 10 percent was followed by price hikes for the company's Formula II and III milk.

Meanwhile, the price of newly packaged Wyeth Gold infant formula milk has also risen by 10 percent.

"The price has been increased for at least half a month, besides ABT, the (price of) Nestle formula milk power has also increased around 10 percent," said a saleswoman at a Leyou store in Beijing, who would only give her surname as Li. "But the increases have not affected our sales."

"I hate price hikes. It means my husband and I have to spend another 200 yuan a month on infant milk for my daughter," said Li Yan, who has a child aged six months. "But there's no other way out, I dare not to buy Made-in-China products and risk her life as I only have one kid."

Although the price of imported formula milk has continued to rise, a large number of Chinese consumers are unwilling to accept homemade milk powders because of safety concerns.

In 2008, six infants died and 860 babies were hospitalized with kidney stones and other renal damage after ingesting milk and infant formulas that contained the toxic chemical melamine.

In a separate incident four years before, a batch of watered-down milk resulted in the deaths of 13 infants from malnutrition. Meanwhile, in July last year, the authorities reported the seizure of dairy products contaminated with melamine.

In the wake of these scandals, many mainlanders have opted to purchase imported diary products, or have even traveled to Hong Kong to buy large quantities of imported diary products. The high demand has resulted in a local shortage of formula milk.

Data from China's General Administration of Customs show that the country imported 268,500 tons of milk powder in the first five months of the year, an increase of 49 percent year-on-year. Full-year imports may reach 500,000 tons.

The rise in the price of imported formula milk came just two months after the National Development and Reform Commission, China's economic planning body, held talks about price increases with six foreign milk powder manufacturers, including Nestle SA, Ausnutria Dairy Corp and Wyeth, a unit of Pfizer Inc.

The talks were part of China's attempts to cool inflation, which has been the government's top priority this year.

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