THE Competition Commission is investigating claims that milk prices are being fixed at the expense of the public.
Newly-appointed CPC boss Panayiotis Kallis received a letter from the Commerce Ministry on Thursday, requesting an investigation into all the factors that contribute to the price of milk.
At first view, the ministry believed retailers had been pre-arranging the price of milk much higher than acceptable.
The commission will also investigate whether recent price increases in dairy products are justifiable, looking at the industrial cost of milk from 2001 until today.
An announcement by the CPC yesterday read: “Regarding the matter of fresh pasteurised cow milk, the Commission for the Protection of Competition has received the relevant information from the Commerce Ministry. The matter will be handled in the framework of the powers and authorities of the Commission, as they are set by the relevant legislation.”
Agriculture Minister Fotis Fotiou said yesterday it was clear that certain companies were profiteering when it came to milk.
“It is now clear that certain people are trying to profiteer at the expense of the consumer,” he said. “I believe that efforts by the Commerce Ministry to publish comparative prices and publicise all those who are profiteering is a good measure, which will, however, have to be used correctly by the consumer, who is now called on to punish those who are profiteering at his expense.”
He said his ministry had received some information regarding milk pricelists. “I believe the CPC is already evaluating this information. We are in co-operation with the Cyprus Dairy Organisation to offer any information that may help, because we have made our own analysis and evaluation of the situation. We gave the information and the CPC will decide what to do further.”
The President of the Cyprus Dairy Organisation, Andreas Marangos, yesterday offered an account of how the price of milk is reached, starting from the producer and ending at the retailer.
“The producer sells the milk to the organisation for around 27 cents. The producer doesn’t receive 27 cents of course, because there are transportation and other costs,” Marangos explained.
“That 27 cents is given by the organisation, which processes the milk, transfers it to the final point of sale, whether it is a supermarket or bakery, and they [the organisation] charge 53 cents, which means they’re charging 26 cents for their costs,” he said, adding: “I think an investigation is needed, because this amount is much higher than it was in 2001, when the price of milk was set by the [Commerce] Minister.”
But the biggest profit, according to Marangos, is made by the retailer, who buys the milk at 53 cents and sells it on for 68 cents. “These 15 cents that he gains is 28 per cent. This is a daily profit, meaning you get a daily 28 per cent profit. The profit is very high for a product that is consumed daily.”
He revealed that when the prices used to be set by the ministry, retailers made just under three cents in profit.
“We may have some suspicions, but certain investigations need to take place to prove them”, Marangos concluded.
