What caused the surge in milk powder prices?

Recently, the domestic milk powder brand Wandashan announced a price increase of about 10%. Bright milk and other domestically produced milk also followed suit. The foreign milk powder is not to be outdone. Even the Mead Johnson, whose price has remained unchanged for 2 years, is finally unable to bear it. It plans to increase prices by the end of March. What is the reason for this new round of milk powder surge?

Reasons to guess one:

Raw material transportation, artificial marketing costs increased pressure on domestic milk powder Wandashan, becoming the first dairy company to start raising prices at the start of the gun in 2012, and said: “The price increase is a last resort, and it will become a problem if it does not increase its price.” In 2008, with the continuous price hikes of foreign milk powder, domestic prices were also rising. The purchase price and raw labor costs of raw milk continued to increase. Channel fees for distributors to rebate access to shopping malls and supermarkets, and advertising costs also increased milk prices. The pressure faced has prompted a substantial increase in the price of milk powder.

Reason 2: High price equals high quality With Sanlu milk powder's melamine incident, domestic milk powder food safety incidents occur frequently, consumers are more inclined to high-priced foreign milk powder, perhaps domestic food safety incidents occur frequently, and the price is high. High quality mentality dominates consumers' preference for foreign milk powder. In addition, the prices of domestically-used commodities are all increasing, and in recent years, "high-priced foods" have become commonplace. Consumers' affordability to prices has also been continuously strengthened. Domestic milk powder also needs rising prices to keep pace with the market.

Reason 3: The increase in consumer groups this year is the Year of the Dragon, and the “Dragon Baby” has also come into being. The domestic consumer groups have increased dramatically. Domestic milk powder also wants to win a place through price increases and regain market sovereignty. Since the outbreak of melamine, the quality of domestic milk powder has not been guaranteed, and domestic milk powder such as Mengniu and Shengyuan have still been subject to quality problems. Although in recent years, the foreign milk powder has also been exposed to quality problems, but the foreign milk powder can still be welcomed by consumers, coupled with the recent years, the price of imported milk powder popular, natural domestic milk powder will not easily give up this golden year.

There are many reasons for this surge of milk powder prices. What are the basic reasons for this price increase? We can wait and see. Perhaps this price increase is just a marketing tool.