Domestic milk powder is no longer difficult to support, rising prices want to break

In 2008, Sanlu suffered from melamine in domestic milk powder. After a long period of time, the whole domestic milk powder market was very quiet. He only heard the continuous rise of foreign milk powder, but this situation has been accompanied by Wandashan Dairy. The 10% increase in the factory price of milk powder was broken.

This year’s boom of the New Year’s children gave birth to the infant market. The industry has already predicted that the price of infant products will rise to a higher level. In addition, the increase in raw materials, transportation, labor, and marketing costs has caused prices to rise. The channel rebates for distributors and shopping malls and supermarkets account for a large part of the cost of sales. The increase in advertising costs has become a key factor in the rise in the cost of dairy companies. Some brands have general business performance, there is a backlog of products, companies raise prices, excuse is the formula upgrade, change packaging, and some products change the package price increase listing, through the increase of gifts to attract consumers, has become a factor of price increase. At present, the magnitude and timing of the price adjustments of various milk companies are not the same. A formal written notice of price increases has been issued to the hands of dairy dealers. However, dealers are still waiting to see their respective market shares. No notification of price increases was issued to dairy retailers. This is the reason why “only the stairs rang” in the milk retail terminal market in our city.

In fact, after the melamine incident in 2009, a number of domestic milk powder brands had quietly increased prices by about 10%, but the market was sceptical and the sales volume declined significantly. Since then, domestic milk powder prices have remained unchanged.

Does not increase the price of survival are problems

It is understood that Wandashan is a local enterprise in Heilongjiang, and the Shandong market is its key training market. At present, the infant formula milk powder series accounts for a large proportion in Shandong's domestic milk powder market. It was learned from the dealers that since the end of 2008, Wandashan has raised its price for the first time. At present, the price of international milk sources is relatively stable. Wandashan's price increase does not seem to have a gimmick.

“In the past two years, the company has been insisting on internal digestion. Now local prices in Harbin have doubled compared to 2009, and companies have been unable to absorb the rising costs.” On the phone, Zhu Weihua, a staff member of the Wandashan Dairy Enterprise Information Department, spoke to reporters. Rough water, raw milk purchase price, transportation, labor and other comprehensive costs have risen, no increase in prices, business survival has become a problem. According to reports, Wandashan is a state-owned enterprise that has been strictly in accordance with the guidance price of local governments to purchase raw milk, and the guide price is based on the protection of dairy farmers, which means that the cost of the milk business is higher than other dairy companies. Out of 20% -30%, which also exacerbated cost pressures.

Although Wandashan put the cost first, Zhu Weihua said that the quality of Wandashan is not lost to domestic first-line brands, revealing another reason for rising prices. It is understood that this time, Wandashan did not adjust the price of liquid milk, and the weight of the cost was much lighter. In this regard, Zhu Weihua admitted that liquid milk is a fast-moving consumer product and that the market is fiercely competitive. Currently, Wandashan liquid milk is still in In the period of opening up the market, the prices will not be lightly raised.

Domestic milk powder prices have advantages and disadvantages

In recent years, the milk powder market has frequently adjusted prices. From the price list, it has always been Wyeth, Nestle, Mersin and other foreign brands turn up, but can not find the shadow of domestic milk powder. Some dealers said that it has become a common practice for foreign milk powder prices to increase every year. There is nothing strange about this. However, for Wanda Hill price increases, some consumers said that the price is the advantage of domestic milk powder, after the price increase is better to buy imported milk powder. Wandashan first to raise prices, whether it caused changes in the industry structure? In response, the reporter interviewed Wang Guangwei, an expert in marketing planning.

Wang Guangwei analyzed that the rising costs of raw materials, labor, and operations are the ones on the one hand; the promotion costs of external promotion and various publicity also account for a certain proportion; at the same time, consumers are more inclined to foreign milk powder after the melamine milk powder is exposed. The high price means that high-quality mentality also encourages domestic milk powder prices; In addition, vegetable oil and other food prices are rising, and consumers' price tolerance is also one of the reasons for domestic milk price increases.

“The Wandashan price increase will help improve the brand image, but at the same time it will lose a part of the market. In general, the benefits outweigh the disadvantages.” Wang Guangwei said that as a state-owned company, Wandashan, this price increase has a wind vane effect, meaning that the entire The trend of the industry, coupled with news of foreign milk powder prices, in 2012, milk powder market rose or a foregone conclusion.

Narrower production and sales cycle

A person in charge of Wandashan Dairy Company told the reporter that if sellers reduce the sales volume of supermarkets and increase some of their products to sales in second- and third-tier cities, the overall sales volume of dairy companies has not been affected by the current situation, but this It will inevitably affect the market share of the enterprises in the first-tier cities, thus affecting the long-term development, because the first-tier cities from the consumer groups, to product promotion and brand promotion are second and third-tier cities can not be compared.

“Manufacturers pay for supermarket admission fees for suppliers, and the marketing costs naturally increase. In order to ensure that profits only increase prices, price increases will lead to supermarkets no longer purchase, a large amount of goods in the hands of suppliers, suppliers do not pay admission fees. Still continue to purchase ... milk powder production and marketing cycle so happened." Dairy experts said that such an act of selling goods, so that a large number of milk powder can not fully open up the sales channels, the first time into the store, some real estate brand name may narrower the road The distance with consumers will be further and further away.

Market recognition only has a way out

Why does a domestic milk powder rise in price, it will fall into the production and marketing cycle, and a rise in the foreign milk powder is still in control of the market right? Dairy Association related person in charge told reporters that the frequent increase in the price of foreign milk powder did not lose the market, and a rise in prices of domestic milk powder into a production and marketing cycle, a direct reflection of consumer confidence in domestic milk powder. Dai Dan, a dairy expert, said that in fact, real estate brands such as Wandashan are of good quality, but they should go from the acquisition of raw milk to the production and listing of products, and be as open and transparent as possible, and build consumer confidence in the market. At the same time, we must actively explore the market and do a good job of market channels so as to ensure a stable market share in the event that foreign milk powder enters the mainland market. At the same time, it is also recommended that consumers reverse the concept that “foreign milk powder is safer than domestically produced milk powder”. If the market share of foreign milk powder continues to expand, China will completely lose its pricing power for milk powder. Chinese consumers can only be kidnapped by foreign milk powder and allowed to be slaughtered.

As for the rise in the price of milk, when the “boots landed”, industry sources said, “The raw milk price will rise around May, when dairy products may have a more concentrated price adjustment.”