Fonterra cuts adult milk powder price in China

Updated: 2013-07-17 15:48

By Chen Ziyan (

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Fonterra Co-operative Group Ltd, New Zealand's largest milk processor and dairy exporter, announced on Tuesday it plans to cut the price of Anmum Materna products (milk powder for expectant mothers) by 9 percent in China starting next month, National Business Daily reported.

According to Fonterra, the price cut is to better meet consumer needs in light of recent price adjustments in the industry.

After Chinese authorities launched anti-monopoly investigations over alleged price-fixing by a handful of manufacturers, more dairy firms, including Wyeth, Dumex and Abbott, cut their baby formula price by 4 percent to 20 percent, with three of them promising no price increases in the next one to two years.

For a long time, Fonterra did not directly participate in the competition of baby formula producers, but played more of the role as a dairy products supplier. The dairy giant now has two adult milk brands - Anlene and Anmum -- selling in China.

“Since Fonterra has fewer final products in China, the price cut in adult milk is a response to the country’s investigations,” said Song Liang, a dairy analyst at the Distribution Productivity Promotion Center of China Commerce.

Currently, the milk powder products Fonterra sells in China are mainly large-packed, including skimmed milk and whole milk, which takes up 80 percent of China’s dairy imports, according to the report.

The company is planning to launch its branded baby formula in some areas in China, such as Beijing, Shanghai and Guangzhou. It will consider furthering its business across the country if that proves successful.

“The selling price for the upcoming baby formula will not be too high, judging from the current milk prices Fonterra offers” Song said.