Monday, Jul 11, 2011
(Adds details, CEO comment in 5th, 6th paragraphs.)
RIYADH (Zawya Dow Jones)--Saudi Arabia's Almarai Co. (2280.SA), the region's largest dairy producer, said Monday it will cancel a recent price hike for some of its dairy products to comply with a move by the ministry of commerce and industry to curb price increases made arbitrarily.
Almarai is taking the price of its 2 litre fresh milk and laban pack sizes in the kingdom back to levels prior to July 1 with immediate effect, it said in a statement posted on the Saudi bourse website.
However, Almarai, which had increased the price of a 2 litre fresh milk and laban pack from 7 Saudi riyals ($1.9) to SAR8 "believes that the rationale and justification for the price increase is still valid."
On Sunday, the kingdom's Ministry of commerce and industry warned dairy companies that have arbitrarily increased prices of fresh milk and laban packs. The ministry said whoever increases prices or refuses to sell at prices specified by the government will be considered to have violated rules and will face penalties.
Almarai's Chief Executive Abdulrahman Al Fadley told Dubai-based Al Arabiya Channel Sunday that the firm only passed 30% of the increase of costs to its customers and it doesn't intend to hike prices again. He added that sales of its 2 litre fresh milk and laban packs, which account for 50% of the firm's total sales, weren't affected by several boycott campaigns in the kingdom.
Almarai shares closed -2.1% at SAR94.75 Sunday; the stock slipped 0.3% Saturday after the company said its 2Q net profit edged up 1.8% on year to SAR349.3 million. NCB Capital noted, in summary, this was a weak but in-line set of numbers from Almarai.
-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
11-07-11 0718GMT
