Most dairy companies in Saudi Arabia have raised the prices of their products, reaching up to 33 percent, effective from Sunday, Jan. 1.
In a statement on its official Twitter account, Saudi dairy giant Almarai Company attributed the hike to three main reasons. They are increased shipping costs, higher cost of production ingredients, and increased fodder prices.
The company said that these factors resulted in a huge increase in the production cost in the recent past, which was reflected in the adjustment of the prices of a few dairy products to cover part of the higher costs.
The rate of increase in prices for the end user amounted to about 33 percent on some products, as the prices of products that were previously sold at SR1.5 rose to SR2, and the increases included almost all dairy products known to consumers.
The hike in prices of dairy products comes at a time when profits of some companies exceeded SR1 billion during the first nine months of 2022.
The profits of a dairy company listed on the Saudi Stock Exchange (Tadawul) during the nine months of the year 2022 amounted to more than SR1.4 billion, with an average daily profit of SR5.2 million, while the profits of another listed company amounted to about SR70.4 million during the same period, with an average daily profit of SR261,000.
Meanwhile, consumers demanded the intervention of the Ministry of Commerce as it happened 11 years ago following the raising of prices by a dairy company at the time. The demand had prompted the ministry to compel the company to return the selling prices of some of its products to what they were in the past.
This was done in light of stability of prices of a number of dairy products, similar to the commodities available in the local market, and this came after the company raised earlier the prices of some of its products in the local market.
The ministry confirmed at the time that this was in implementation of the Law of the Commerce Ministry’s Jurisdictions and its emphasis on the importance of monitoring markets and sales centres in all regions of the Kingdom, to rein in any manipulation and hike in prices.