High dairy prices explained
16:53' 19/10/2009 (GMT+7)

VietNamNet Bridge – Responding to criticism that dairy product prices are unreasonably high, Nguyen Ngoc Kinh Luan from Friesland Campina asserted that fresh milk from Vietnamese farmers costs more than in the Netherlands and explained that the rise in auxiliary expenses has prevented a reduction in consumer prices.

 

Luan, Head of the Foreign Affairs Division of Friesland Campina (the owner of Dutch Lady, Friso and Fristi brand names) affirmed that the company follows strict procedures in collecting fresh milk from farmers. He stated that the company never purchases milk with unclear origin.

 

In an interview with local newspaper VnMedia, Luan compared 2009 milk prices in the Netherlands, between 6,320-7,430 dong per kilo between for 4.41 percent fat, with Vietnam’s milk prices of 7,670 dong per kilo. With the farm hygiene bonus, the company pays 7,770 dong per kilo, a rate that would make Dutch farmers “jealous.”

 

Friesland Campina offers high purchase prices to encourage the development of milk cow farming in Vietnam.

 

Fresh milk from Vietnamese farmers accounts for 25-30 percent of the total materials used to produce liquid dairy products. Currently, the percentage remains low due to an underdeveloped husbandry industry in Vietnam.

 

When asked to comment about the “abnormally high-priced” dairy products reported by local newspapers, Luan responded that his company has not raised the prices of dairy products even though the inflation rate reached 23 percent and input material prices have been on the rise since the beginning of 2009.

 

Luan detailed that, in 2007, the world’s average price of milk materials for dairy products was $2,500 per ton, a price that doubled in 2008. Meanwhile, the prices of finished products increased slightly by 5-10 percent.

 

While the prices of milk materials decreased in 2009, other expenses like labor, electricity, fuel and packaging, have all increased. 

 

In recent news, the Price Control Agency under the Ministry of Finance is now attempting to force foreign dairy product suppliers to register prices to control price hikes.

 

VietNamNet/TP

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