The agreement signed by 24 dairy manufacturing companies in May 2000 to fix prices was breached recently by a new price war, reported KSAToday daily. Al-Marai Dairy Products Company, one of Saudi Arabia’s largest dairy product manufactures, suddenly began offering substantial discounts for its goods.
Company sources report that the new prices represent a long-term decision, rather than a short-term commercial goal. The two-year agreement to end the crisis signed in May of 2000 fixed the price of one gallon of milk at 12 Saudi riyals ($3.2), a three-liter container cost SR10, and two-liters sold for SR7.
The agreement also set marketing and promotion regulations, and established a 30-40 day promotion period for new products. Furthermore, the deal set the guidelines for absorbing the milk production surplus, which reached 150,000 liters last year. Currently, Saudi milk output reaches approximately 1.8 million liters per year. ― (MENA Report)
© 2001 Mena Report (www.menareport.com)
