All national dairy producing companies are expected to announce an increase in Laban prices in a few days, sources said. Some factories decided to follow Almarai Company which raised the price for its two-liter Laban pack recently. Factories will increase their product prices gradually over the next two months to bring all companies in line. They added that small factories have not raised prices in the past – despite a 30 percent increase in production cost – because the three major companies did not do so. So the sudden increase by Almarai now has opened the door for small factories to take similar steps. The three largest companies are Almarai with a 35 percent market share, Alsafi with 27 percent and Nadec with 20 percent. One company's move to raise or reduce prices would force the others to do the same. This happened a few years ago when Almarai reduced the price of some of its products. The reasons for the increase are blamed on rising costs of raw materials, higher wages for workers and higher maintenance and operation fees. These factors have resulted in companies raising prices to maintain lucrative profit margins. Sources added that the increase in prices of the two-liter Laban pack is because it is the most widely consumed product. It is difficult for companies to increase the price of their SR1 products and most companies are likely to stick to increasing the price of one product. Sources said dairy companies are not involved in price fixing. The Dairy Producers Committee of the Council of Saudi Chambers and Industry never discusses prices, they said. They discuss issues related to raising cows and health-related public interest matters, they added. __
