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Milk powder sold under odd requirements

19 Sep 2021

  • Consumers need to buy ‘other’ products to qualify to purchase
  • CAA to take action against perpetrators
  • Fonterra, Milco deny imposing any requirement
By Yakuta Dawood Amidst a shortage of milk powder in the local market, many vendors around the island have been selling milk powder packets/boxes they have in stock under odd conditions, such as mandatorily requiring the consumer to buy yoghurt with the milk powder packet/box, The Sunday Morning Business learns. The Consumer Affairs Authority (CAA) is now expected to dig deeper into the ongoing situation to uncover the truth behind said illegal activity carried across the country, where consumers are forced to buy an additional product/s in order to qualify to purchase milk powder. Speaking to us, CAA Executive Director Thushan Gunawardena stated that these reported incidents are absolutely illegal and that manufacturers know about them. Therefore, he said, there is a possibility that the traders involved in selling these goods are making these decisions and not the manufacturers. “I cannot confirm who’s behind this, but there is a possibility that it might be the traders and not the private companies. However, the CAA has executed an inspection into the situation and will get to the bottom of the issue,” Gunawardena assured. We spoke to Fonterra Brands Lanka, to whom the accusations were legally directed on social media accounts. Responding to an email query, an official stated: “Fonterra Brands Lanka would like to emphasise that we have not authorised/sanctioned any trade promotions/retail scheme/bundled offers for full cream milk powder. We disapprove of the same.” Adding further, the official expressed that the company has consistently communicated to the retail trade to comply with the selling prices approved by the authorities as printed on the pack and also to comply with the protocols governing the industry. Further, speaking to The Sunday Morning Business, Milco Sri Lanka Marketing Manager Sarawanabavan Samyaiah also denied the allegations circulating on social media, stating that a disciplined company that is very much concerned about giving better services to the general public would not take such a decision. “More than the brand, the trust from the consumers is there, which is why despite all obstacles faced by the prevailing pandemic, we are doing our best to distribute our products to all traders by commencing daily operations at 4.30 a.m. in the morning,” Samyaiah added. Recently, former Weligama Urban Council (UC) Chairman Rehaan Jayawickreme wrote on his Twitter account: “Multiple people from Weligama called me and informed me that #Anchor milk powder boxes are sold at certain shops with a strange condition. They have been told to purchase 5 #Anchor yoghurt packs in order to be able to buy a 400g milk powder box?” However, as complaints across the island are fast spreading on social media platforms, the traders have been saying that they are following orders directed by the companies involved. Meanwhile, the milk powder industry has been requesting a revision of prices, a duty relief, or a combination of both since March this year. When this request was not granted by the authorities, Sri Lanka experienced a milk powder shortage recently, as companies had stopped supplying to the market to avoid losses. The last time the price of imported milk powder was increased was in September 2019; this was done through the milk powder pricing formula that was implemented under the former Government. Accordingly, the price of a 1 kg packet of imported milk powder was increased by Rs. 50, while the price of a 400 g packet was increased by Rs. 20. Similarly, local milk powder prices were also increased to the above prices in May 2020, following a request made to the CAA. Following this, the milk powder importers requested a price hike from the CAA in June 2020, citing reasons such as the depreciation of the rupee. However, this was not approved by the state regulator. Milk powder is considered an essential item in Sri Lanka, with price controls imposed by the Government. Right now, the price of 1 kg of milk powder (locally manufactured and imported) is priced at Rs. 945 while the 400 g packet is priced at Rs. 380.


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