Following the collective price hikes of Mead Johnson, Mesophyll, and Abbott at the beginning of this year, the foreign milk powder after a brief period of silence seemed to be unbearable again. According to the Beijing Daily, several oceanic milk powder brands are brewing a new round of price increases. At present, Mead Johnson and Nestlé have issued price adjustment notices to merchants, with the total product gains of 13% and 10% respectively. Other foreign brands such as Meso may also follow suit.

The domestically produced powdered milk that is not for power is fundamentally this time the price of foreign milk powder seems to be more high-sounding than before, and that is the tariff recovery. According to the General Administration of Customs, since February 18 this year, the tariff on fresh milk products imported from New Zealand has been restored from 7.5% to 15%; on March 1, the tariff on imported milk powder from New Zealand has been restored from 5.8%. 10%.

However, according to industry insiders, the tariff increase actually has little effect on the cost of milk powder. The price of a can of New Zealand original milk powder is about 100 yuan. After entering the domestic market, the retail price is around 200 yuan, and the tariff is adjusted from 5.8% to 10%. It only adds a few dollars, and its profit space is minimal.

Looking at the history of rising prices of foreign milk powder, the purpose of milk price increases is only one, maintaining high profits and high gross margins. The cost of milk powder is mainly composed of freight, sales, publicity and promotion expenses, and warehousing expenses, and the proportion of tariffs is only a small part. However, according to Mead Johnson’s 2011 financial report, the company’s 2011 sales were US$3.677 billion, an increase of 17%, and the gross margin was as high as 63%.

The reason why the foreign milk powder dared so unscrupulous prices have to be attributed to the domestic milk powder is not to force. Since the melamine exposure, domestic milk powder has been greatly reduced in the eyes of the people. Afterwards, domestic dairy products are frequently exposed to quality and safety problems, and the public relations of the crisis are very "ridiculous" and it is difficult for consumers to see hope.

Only by ensuring the quality and safety of domestic milk powder will the price of foreign milk powder cool down.