Due to the recent shortage of imported milk powder in the local market, long queues of people to buy milk powder were observed in Sri Lanka. However, government decided to remove the price control for milk powder packs in order to make the products sufficiently available in the market.
Just after the lifting of controlled prices, a number of social media posts went viral, alongside a photo of the upper part (the part which is shown displays the manufactured date and the price) of a milk powder pack. It was widely claimed that even before the government decided to deregulate prices of milk powder, dairy companies had increased the prices of milk powder. Let’s find out the truth about this claim.
Social Media Posts
Shown below is a Facebook post critical of the price rise. This post suggests that old stocks are being sold at new high prices and urged users to refrain from buying these products.
Also this post carried a screenshot from a Tweet, which was later deleted. The English translation of the Tweet is provided below.
“Price control for milk powder was removed on 7th of October. Manufactured date of this 400 grams pack shows as 1st October, priced at Rs.550/- for a 400 grams pack. How can this happen?”
Another Facebook user shared a post with the same narrative along with a full image of the top side of the said pack priced at Rs.550. The brand was seen as “Raththi තේ මුසුව”
Similar posts got high number of engagement among social media users as seen here by viral Facebook shares.
As a prelude to the fact check, we decided to study the government decision which led to this discussion about the removal of price control for milk powder. In a step to make few essential items available in the market, government issued an extraordinary gazette on 8th of October, in which existing price control were removed from items such as milk powder, gas, flour and cement, as seen below.
So it’s clear from this new directive, price controls had been removed from Milk Powder for the categories Full Cream Milk Powder, Non Fat Milk Powder and Infant Milk Powder.
Since this gazette is issued on 08th of October, it is understandable why many users had questioned about the pack priced at Rs. 550, since the price of a 400 grams full cream milk powder pack should have been Rs.380 on the 01st of October.
Before the removal of controlled prices, the maximum retail price for 400 grams full cream milk powder pack was Rs.380/-, the as seen here on the Consumer Affairs Authority (CAA) Website. Archived. Furthermore, as seen in one of the above claims, the milk powder brand (“Raththi තේ මුසුව”) which we see in the viral posts, is not listed in the CAA list of full cream milk powder brands either.
We contacted the Director, Consumer Affairs & Information of the Consumer Affairs Authority (CAA) to get a clarification on this matter. He explained that, in a situation where the government deregulates the prices, the prices for imported milk powder are set by the recommendations of Milk Powder Importers Association.
Then we contacted Asoka Bandara, the media spokesman of Milk Powder Importers` Association. He said the new agreed prices for 400 grams full cream milk powder pack is Rs.480/- and for one kilogram pack is Rs. 1195/-, as reported here
Since Fonterra is the company which owns “Raththi” brands, we contacted Marketing Manager of Fonterra Sri Lanka to get their version of these viral claims. He clarified that the image going viral on social media, belongs to “Raththi තේ මුසුව”, a new product launched in October, which does not belong to “Milk Powder” category. He added that, the government gazette related price changes were not applicable to this product, “Raththi තේ මුසුව”, categorized as a cream flavored food drink.
Fonterra Sri Lanka Marketing Manager also clarified that, before deregulation of prices, the price for 400g pack of Raththi full cream milk powder was Rs.380/- and if there was any pack with the manufacturing date of 01st October it would have been priced the same, while the “Raththi තේ මුසුව” (Raththi Tea Mixture), cream flavored food drink has been priced at Rs.550/-, from the beginning.
Here is a comparison of the top side of a Raththi Tea Mixture 400 gram pack priced at Rs. 550 on the left and Raththi Full Cream Milk Powder pack priced Rs.380 on the right.
Front view of both these products can be seen as below.
We checked few supermarkets shelves on 10th of October, but we could not find both of these products, as many brands were still scarce in the market. Below is a Tweet by a user who had come across the “Raththi තේ මුසුව” (Raththi Tea Mixture).
Also we observed that there were other products such as malt drinks and nutritional supplements which did not come under the “milk powder” category, similar to “Raththi තේ මුසුව” (Raththi Tea Mixture)
Meanwhile, Upul Rohana, the Chairman of Public Health Inspectors (PHI) Union responded in a comment to one of the social media post confirming the above mentioned facts, as seen below.
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According to our investigation, the post claiming that prices of certain milk powder packs were increased, even before government’s decision to increase the prices are misleading.
The confusion was caused as images of “Raththi තේ මුසුව” (Raththi Tea Mixture) pack, a recently launched cream flavored food drink were shared claiming to be a product under “milk powder” category for which the price controls were removed. However the relevant authorities and the company which owns the brand Raththi Tea Mixture clarified that this product did not belong to “milk powder” category, hence the price changes governed by the gazette were not applicable.
Title:Were prices of Milk Powder Increased before Government Decision To Raise Prices?Fact Check By: Kalana Krishantha