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[May 26, 2014]
New KCC cuts retail milk prices [Business Daily (Kenya)]
(Business Daily (Kenya) Via Acquire Media NewsEdge) New KCC is Tuesday morning expected to cut retail milk prices by Sh4 for the half litre packet in the race to grow market share in a market dominated by Brookside.
The firm Monday said that premium fresh milk dubbed Gold Crown will retail at Sh41 from Sh45 while a litre of long life UHT brand will drop 28 per cent to Sh87.
The cuts have been made possible by the lower farm gate prices that saw the processors cut prices for raw milk to Sh30 a litre from Sh40 at the start of the year due to a rise in supply.
The drop in prices comes as Kenya experiences a rise in the cost of basic commodities like maize flour, electricity and fuel that all went up this month.
"The prices will start to be effected from today depending on the system change at the supermarkets," said an executive of New KCC who sought anonymity.
READ: Food prices up as crop failure hurts harvests The Business Daily failed to get a comment from market leader Brookside, which deals in Fresha and Molo milk brands, on whether it will follow New KCC's path.
Brookside, which has a 44 per cent stake compared to New KCC's 20 per cent, has this year set the market trends with its review of farm gate prices.
But New KCC has kept the price of sweetened milk and yoghurt unchanged.
The onset of rains has improved animal forage that ultimately lifted supplies, prompting the processors to cut farm gate prices. The Sh40 the processors have been paying suppliers is the highest ever in the dairy industry and lasted seven months.
Flour prices this month increased by Sh8 for the two-kilogramme packet while the energy regulator raised fuel prices and electricity charges to a two year high.
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