Mengniu says price rises regular adjustments
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China Daily, December 30, 2011
While hackers left messages on the official website of Mengniu, China's biggest dairy producer, calling the company "a disgrace", the company, which is embroiled in a food safety scandal, confirmed on Thursday that it will raise the price of some of its products.
"We will raise the price of some products, mainly pasteurized milk, but the price hikes will not apply to all our products," Ji Xiaodong, an assistant spokesman for the company told China Daily.
"The increases are regular price adjustments," he added.
An officer surnamed Shen from the public relations department of the supermarket chain Ito Yokado, said they received notice of the price rises from Mengniu on Wednesday.
"It said the reason for the price increase is rising costs," Shen added.
However, sales of Mengniu products have fallen after the General Administration of Quality Supervision, Inspection and Quarantine released the results of a random check on dairy products, which found the amount of aflatoxin, a cancer-causing toxin, in a 250 milliliter carton of a batch of milk produced by the company on Oct 18 in Meishan, Sichuan province, was more than twice the national limit.
A worker surnamed Zhao in the dairy product area of an Ito Yokado branch in Beijing said sales of Mengniu milk have decreased since news of the test results broke.
"Even some old ladies have avoided the brand and said they are scared of the contamination," she said.
Some businesses are boycotting the brand as well.
"We have stopped providing Mengniu milk in all of our hotels," Zheng Nanyan, chief executive officer of the 7 Days Inn Group, wrote on his Sina micro blog on Thursday.
However, besides Mengniu, two other dairy companies Sanyuan and Yili have also released notices announcing price increases to retail outlets.
The owner of a Yili franchise store in Haidian district, who declined to give his name, told China Daily that the price increase came into effect on Monday.
"A range of categories, including some room temperature and pasteurized dairy products, are involved," he said.
Sanyuan also attributed the price increases to the rising costs of raw materials.
But although labor and transportation costs might have increased, some dairy experts have pointed out the cost of raw milk has declined.
"The price of raw milk bought from farmers has fallen 15 percent in the past year," said Wang Weimin, chairman of the dairy association of Xi'an, Shaanxi province.
Wang Dingmian, chairman of the Guangzhou Dairy Association, noted that "it is usually promotion and clearance sales at the end of year instead of price rises".
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