Govt says no to milk powder price increase

Irangika RANGE

The Cabinet Sub Committee to control and reduce the Cost of Living headed by President Mahinda Rajapaksa which met at Temple Trees on Tuesday, has decided not to permit an increase in milk powder prices after long deliberations on the prevailing milk powder prices in the local and international markets.

Trade, Marketing Development, Co-operatives and Consumer Services Minister Bandula Gunawardena addressing a media-briefing in Colombo yesterday, said a request from milk powder importing companies for an increase in prices was taken at the meeting. The milk powder importers had requested an increase of Rs 135 on a one kilo packet and Rs 35 on a 400 g packet. But, we did not permit this giving thought to the consumer,” he said.

The Minister said the Finance Ministry has promised to provide relief to milk powder importers by way of tax adjustments on milk powder imports.

He said that false propaganda was being spread in the country that milk powder importers are engaged in creating an artificial milk powder shortage on the basis that the Consumer Affairs Authority had not permitted a price hike.

The Minister rejecting this false reports said milk powder importers have agreed to continuously supply adequate milk powder stocks to the market by using the tax relief provided by the Government.

He said the maximum retail prices of Rs 225 for a 400g milk powder pack and Rs 550 for a one kilo pack will not be changed since the Government has declared milk powder as an essential item.

The Government has continuously intervened to reduce milk powder prices on several occasions to provide relief to the people. Milk powder importers requested to increase the price up to Rs 320 for a 400g milk pack during the global economic crisis in 2008. Despite the negative impact, the Government took measures to remove all taxes imposed on the milk powder importers providing relief for both consumers and milk powder importers at that same time. Then the price was reduced to Rs 275 for a 400g milk pack. Again the milk powder prices were reduced twice upto Rs 245 in July 2009 and Rs 225 in November 2009.