Nestle to raise milk powder prices up to 30% in China

Nestle SA, the world's largest food and beverage company, will raise its milk powder products in China by 5% -30% from next month in response to rising costs in materials, which is the second time of such increase this year, sources reported.

The move will be conducted through raising prices directly or reducing net content or applying both, the report said.

The Switzerland-based company said costs for making diary products experienced an unprecedented growth from 12% to 100% last year. For instance, price of fresh milk rose 50% in 2007 and that of crude palm kernel oil soared 100% compared with last October.

Urged by the rising cost pressure, the company has to take action this year, even as efficiency improvements have reduced water and energy use per ton of milk powder in China by over 60% since 1999, the company said.

At the beginning of this year, Nestle raised prices of some of its products including coffee, chocolate and diary products, however, the price rise was kept within 10% at that time.