Foreign formula prices rise, consumers turn away

After foreign formula producers and distributors announced new price increases, many consumers have decided to purchase domestically-made products.

Dumex Vietnam has applied new prices for 17 of its products since July 19, 10 percent higher than previous prices. Dumex Mama Gold Step 0 now sells at 129,000 dong per 400 gram carton and Dulac Gold 1 is 184,000 dong, an increase of 17,000 dong, while Dupro Gold 2 price has risen by 16,000 dong.

Dumex Vietnam explained that the company did not raise prices for a long time, but the dong/dollar exchange rate and material prices keep rising, so it must raise prices now.

Nam Duong Company, the distributor of XO brand formula, has also decided that 14 XO brand products will cost 2.5-5 percent more as of August 1. As such, XO Mom will be 171,000 dong per 400 gram carton, XO1 at 183,000 dong, XO2 will be priced 342,000 dong per 800 gram carton, while XO3 will be 369,000 dong.

Not only milk powders, but also liquid products have price increases. A retailer remarked that, previously, he paid 204,000 dong for a box of 48 180ml cartons, while now the price has climbed to 216,000 dong.

According to the Price Control Agency under the Ministry of Finance, in January 2010, the prices of Abbott, Mead Johnson, FrieslandCampina Vietnam increased by 7-9 percent over December 2009. In March 2010, Dumex, Meiji, Milex raised prices by 8-10 percent.

Meanwhile, Agromonitor, a market analysis and survey firm, forecasted earlier that dairy prices will increase by 12-17 percent in 2010.

Saigon Tiep Thi newspaper conducted a mini-survey on consumer opinions when hearing about the price hikes. Six families out of eight will choose domestic products, and only two will still purchase foreign products.

Thu Van, who lives in HCM City, commented the continued price increases have made her change her mind. “When our child was small, he used Similac products, and ate Enfapro products. However, I have been buying Dielac, a product of Vinamilk, since the beginning of the year,” she revealed.

She shifted to domestic products because they fit her wallet better. Currently, she spends 250,000 dong on dairy products for her child, a sum she can afford.

Like Thu Van, Ngoc Xuan has also decided to use domestic products. Xuan has two children and calculated that “I cannot spend more than 500,000 dong a month on dairy products. Therefore, I cannot purchase expensive formulas like Dumex, Abbott Gain, Grown, or Pedia Sure,” she maintained.

Tuan Kiet has a son who once used PediaSure. In 2009, a 1.8 kg carton was 500,000 dong. Kiet has stopped buying PediaSure since the beginning of 2010, because the price jumped to 680,000 dong. Now his son consumes Nutifood, a domestic product priced at 115,000 dong per 800 gram carton.

While many foreign formula producers have announced price increases, domestic producers have committed to keep prices unchanged in 2010. Bui Thi Huong, Head of the Public Relations Division of Vinamilk, affirmed that the company has no plans to raise prices now. Meanwhile, Deputy General Director of Nutifood Nguyen Thi Lan Huong also confirmed that prices will remain the same, at least until the third quarter of 2010.

Tags: Vietnam Dairy sector, Vietnam formula prices