Issue link: https://maltatoday.uberflip.com/i/1513303
6 maltatoday | SUNDAY • 17 DECEMBER 2023 NEWS KURT SANSONE & NICOLE MEILAK ksansone@mediatoday.com.mt • nmeilak@mediatoday.com.mt Milk war brewing: with producers GOVERNMENT is at loggerheads with Malta Dairy Products after the company raised fresh milk prices by 15c, the second substantial increase this year, MaltaToday has learnt. The government, which holds a 30% minority stake in MDP, has made it clear with the Milk Produc- ers' Cooperative, a farmers' collective that holds the rest of the company shares, it disagrees with the price hike, senior government sources told MaltaToday. The disagreement could lead to the government pulling out of MDP alto- gether, the sources suggested. "The government disagrees with the price increases, which the pro- ducers pushed through despite the hefty government subsidies on ani- mal feed and electricity, which have kept costs down," the sources said. On Thursday, MDP announced higher prices for its Benna milk prod- ucts. A uniform 15c price hike was applied on its full fat milk (dark blue carton), the popular 2.5% fat light blue carton, skimmed milk and lac- tose free milk (orange carton). The price increase is the second this year for Benna fresh milk prod- ucts. In May a similar hefty price hike came into force. Over the span of seven months, despite the subsidies on animal feed, electricity and fuel, the price of the light blue milk carton increased by 22%, while that of fresh skimmed milk shot up by 25%. "The price hike is not justified in light of the subsidies and government has told milk producers it is unfair for people to pay for their inefficiencies," the sources said. The higher prices for fresh milk, a staple product, will contribute to the inflationary pressure households have been dealing with for the past two years although consumers have other imported long-life milk al- ternatives that can be substantially cheaper. When contacted, Malta Dairy Prod- ucts stood by the latest decision to raise the price of fresh milk. A company spokesperson explained that production and operational costs have increased, despite heavy gov- ernment subsidies on animal feeds and electricity. "Even with subsidies on certain in- puts like specific animal feeds and electricity, the broader cost structure, including labour, transportation, and compliance-related expenses, has continued to rise. The previous pricing strategy, while reflecting our commitment to affordability, was not sustainable in the face of persis- tent and escalating challenges," the spokesperson said. MDP explained that previous price adjustments were insufficient to ful- ly offset increasing dairy production costs. "In fact, the prices were not accurately reflecting the economic reality faced by our company," the spokesperson said. "Despite facing higher input costs over time, the company chose to ab- sorb a considerable portion of these costs with the hope that the situation would improve in the future. This ap- proach was undertaken to minimize the immediate impact on consumers and maintain a level of stability in pricing." "However, as the economic land- scape evolved and the challenges per- sisted, it became evident that a more substantial adjustment was necessary to ensure the sustainability of our operations. The decision to increase prices is not taken lightly, and it is a Malta Dairy Products stands by milk price hike, says costs have increased despite government subsidies on animal feeds and electricity Malta Dairy Products, the producers of the Benna milk brand, have raised the price of the fresh milk carton by 15% to €1.15, citing significant increases in production and operational costs GRAPHIC BY MARIANNA CALLEJA