Foreign milk powder prices milk business sales contradiction

Recently, the news that the price of milk powder in foreign dairy companies was lowered was heard. Among them, there were both screams and doubts. However, it is convinced that foreign milk companies are really racking their brains and trying to deal with the NDRC's vertical anti-monopoly investigation. Up to now, 8 milk companies including Bein America, Wyeth, Abbott and Mead Johnson have promised price cuts, of which 6 are foreign companies. In this regard, many people in the industry have turned to worry about the next step in the survival of domestic dairy companies. “We have reduced the price of foreign milk powder. What should we do?”

Foreign milk powder prices!

On July 3, Wyeth took the lead in announcing price cuts in foreign milk companies, and Wyeth’s move triggered a surge in the price of foreign milk powder. Subsequently, Meisujia, Dumex and other foreign brands milk prices have announced price cuts. On July 10th, even Abbott, which had never adjusted product prices since June 2011, and Mead Johnson, known as the "Death Corps," also announced price cuts.

Data show that among them, Wyeth's average decline of 11%, up to 20%; US Sujiaer down 5%; Dumex price reduction rate of 5% to 20%; Abbott price reduction range of 4% to 12%; Mead Johnson price reduction 7% to 15%; Meiji reduced prices by 3% to 7%.

Wang Dingmian, a dairy expert, said that the price cuts of foreign milk companies indicate that they have been warned by the National Development and Reform Commission and take practical actions. The introduction of the dairy industry policy is unlikely to be ineffective, so companies only actively cooperate. For the industry, it is also good news. The only regret is that this kind of supervision is "passive supervision" rather than "active supervision."

Foreign milk powder price is accused of lack of sincerity

The "good deeds" of price cuts by various dairy companies have not been recognized by consumers and have even been questioned by industry insiders.

Wyeth has been accused of "lack of sincerity" because its brand's 1 and 2 milk powders are not listed in price reductions; Abbott is suspected of price cuts; milk powder is not a "main product"; it is "de-stocking," and 5% of Meizu Jiaer and Meiji 3% to 7% of the dairy industry's price reduction efforts are considered by consumers as "thunder and rain is a bit small." Although Dumex's price adjustments have been put on-line and off-line, they have still been accused of being new promotional methods.

Is this price cut "sincerity"?

Abbott denies the “de-inventory” argument and responds externally, saying that “there are six products with price reductions of up to 12%, of which Abbott’s 100 series products have achieved price reductions from one to four stages.” The two-stage powdered milk is exactly what parents need most. Adjusting the prices of best-selling products expresses the positive attitude of our company. The milk powder series that this price reduction is also the main product.”

Cao Jingheng, Brand Director of Wyeth (China), stated that “Wyeth is the first to introduce price cuts in foreign milk powder companies, and it is also the first to implement retail terminals. From this point one can see that the company’s sincerity. And for 1, 2 In fact, we have a sequential plan for the problem that segment milk powder is not included in the price cuts.Beginning in 2014, Wyeth's four-dimensional nutrition formula full range of products, including the 1 year old segment and the 2 year old segment, will continue to offer discounted products to China. In the market, the average decline is 8% -10%, and the formula formula of the new Formulation Wyeth Gold S-26 has risen by 4% due to the upgrading of raw materials and formulas, but at present we have withdrawn this decision and promised There will be no price increase in the next 12 months."

Wang Dingmian believes that the "price cuts", including domestically produced milk powder companies, are indeed selective and sincerity is not enough. However, if it is not true, the anti-monopoly investigation of the National Development and Reform Commission will have more stringent supervision measures.

Domestic milk prices follow suit

However, irrational “double mention” proposal was soon put forward. It also encountered the “collective” price reduction of foreign milk powder, coupled with consumers’ long-standing “prejudices” of domestic milk powder companies, the domestic milk powder companies seem to be trapped in “contradictions.” .

Looking at the wave of price cuts, Bein America and Synbiotics, as domestically-produced milk powder companies, have become "bright spots" when they follow suit. In response, they responded by saying that they are actively responding to the rectification actions of the Ninth Party Committee's milk powder industry.

According to industry insiders, “As the prices of foreign dairy companies have lowered prices, domestic dairy companies have felt the chain reaction caused by price cuts, which has directly caused their market space to be further squeezed, and some domestic dairy companies follow the price cuts in hopes of avoiding the decline. More market space is once again being squeezed.” Another expert analyzed that “The blind price-cutting action of domestically-produced milk powder companies like Bein Me and Hopson will only worsen their living environment.”

“Some domestically-made dairy companies are very aggressive when they follow suit, which is actually an act of “showing good” to the policy. There is no substantive significance.” Wang Dingmian said, “Whether the price of foreign milk powder is rising or falling, the consumer population will not Change, and consumer confidence in the restoration of domestic milk powder will take 3-5 years, that is to say, in the next 3-5 years, the domestic milk powder market is still the world of foreign milk powder.”

Foreign milk powder prices, domestic milk prices will go from here?

The relevant person in the Feihe Dairy Industry stated that “The price reduction of foreign milk powder is bound to put some pressure on the domestic milk powder companies, but the product quality is still an important weight for companies based on the future Chinese market. For the crane, the flying crane has been committed to In order to create a “perfect milk powder” that belongs to the Chinese baby, and stick to the safety production record for 51 years, this is due to the controllable operation of the entire industry chain model of Feihe, not only from hardware and software equipment, industrial layout, etc. The basic conditions for traceability of the entire industry chain, the realization of informatization of internal supervision, and the participation of consumers in the supervision link have made seamless supervision a reality, thus fundamentally solving the product safety risk issue of the company.” CEO of the flying crane dairy industry and CEO Leng Youbin told this reporter: “Not long ago, the Ministry of Industry and Information Technology came to Feihe to do research and said afterwards, “Who said that there is no good milk powder enterprise in the country, and after watching the Flying Crane, we are very confident. ""

Leng Youbin said, “Foreign-funded enterprises, such as Mead Johnson, have direct cooperation with the chain stores after they leave the factory, and the ex-factory price plus a dozen of them will become the retail price. But in China, the mall will charge you an entrance fee, Costs such as display fees, stacking fees, and holiday expenses may add up to a price higher than the price of milk powder itself.Therefore, domestic dairy powder companies have high operating costs, and reducing product prices depends on the construction of the terminal market system. ”

“In the face of further market pressure, domestically-produced milk powder enterprises should, first of all, proceed from their own initiative and strengthen the safety management of milk sources and production links. Product quality is the most important; secondly, the mistakes of domestic dairy companies in the past are always It is easy to be enlarged. This is related to our poor crisis public relations processing capacity. This should be learned from foreign-funded enterprises. Third, we should strengthen the construction of sales channels.” Li Gangfeng, director of marketing at Red Star Dairy, believes that “the domestic dairy companies themselves are “Maori” competition has relatively low product prices, and domestic consumers generally believe that “the more expensive you sell, the better the product.” Therefore, both the consumption concept and the price of domestically produced milk powder should be rationally returned. It depends on the specific situation of the company."

Wang Dingmian believes that “Foreign milk powder price reduction will increase the market pressure for domestic milk powder. First of all, to do a good job of internal strength, in particular, we need to profoundly reflect on ourselves. Whether in the control of raw materials, or in production and processing, should be more To release information to consumers and reverse the crisis of trust. Second, to further reduce costs, especially in the cost of sales channels, reduce unnecessary cost consumption, so as to reduce sales prices and gradually increase market share."