MANILA, Philippines - The Department of Trade and Industry will increase the suggested reference price (SRP) for milk products by about 5% following a price hike notice of a key milk producer in the country.
The DTI said that the SRP change will impact powdered milk, evap and condensed milk products effective Feb 1, 2011
Alaska Milk Corp, which sells 80% of the liquid milk products and 50% of powdered milk items sold in the Philippines, has issued a notice last week that it needs to raise prices following the hikes in raw material costs.
Wilfred Steven Uytengsu, the president and chief executive officer of Alaska Milk, explained to reporters that prices of skim milk, tin plate and sugar increased significantly in 2010, putting pressure on the company's margins.
"Obviously when you see the magnitude, some increases are double in our cost structure so I think [a price increase] is a real possibility, but we will keep it very manageable," Uytengsu assured.
"Margins are lower last year so we have to find different ways to manage those margin pressures," he added.
Alaska manufactures and sells the following milk or milk-based brands:
- Alpine (acquired from Nestle in 2007)
- Liberty (acquired from Nestle in 2007)
- Krem-Top (acquired from Nestle in 2007)
- Carnation (under a long-term license agreement with Nestle)
- Milkmaid (under a long-term license agreement with Nestle)
This price increase in milk comes on the heels of increases in the prices of oil, bread and fares at the Metro Rail Transit and Light Rail Transit.