If you’re trying to keep costs down, you might want to wean yourself off chocolatey malt drinks and make the transition to teh o ais – Nestle Malaysia is planning to charge more for its iconic Milo drinks from May 1 onwards.
Nestle’s managing director Alois Hofbauer said the price increase – which will be somewhere between 5% to 7% – was inevitable, following the price hike in milk products in February due to higher raw material prices.
“Commodities costs are going high, including milk, coffee and cocoa, we have to find ways to offset headwinds internally as we could not absorb all these (costs) increases,” The Sun Daily reports Hofbauer as saying at a press conference after the company’s AGM yesterday.
Hofbauer also couldn’t rule out more price hikes on Nestle products in the future, as prices of commodities are expected to keep rising this year.
He did however stress that any price increases on Nestle products will be imposed gradually to avoid increasing the burden of consumers, which in turn could adversely affect the demand for Milo and other Nestle products.
Nestle is also making adjustments to its operations to adapt to the restrictions imposed on the ongoing water rationing exercises affecting Kuala Lumpur, Putrajaya, and Selangor. Although its manufacturing complex in Shah Alam is not affected by the water rationing exercise, he acknowledged that if the situation prolongs, Nestle will be facing a big challenge as it could not operate without water supply.
“We will focus on leveraging ground water of which two of its wells have been reactivated, besides possibly bringing tankers from Negri Sembilan,” said Hofbauer, adding that the group will look to have more wells.
“We won’t let the plants shut down, therefore we have contingency plans, making sure water supply can last for a long time,” he added.
