SIMILAC milk powder. JB vs SG

[Staff69]

Generally true due to higher business cost in SG but for a pure distribution business, which is what we are dealing with here, cost can be lower per tin of milk powder sold due to higher density of sales and greater economies of scale. For example, you only need 1 distribution centre to cover the whole of SG but in Malaysia or Australia, you need multiple points, so I don't agree everything has to be more expensive in Singapore, it depends.

Do you think a retail giant like Amazon can dilute and weaken the pricing power of the brand owners?

Thats how the local structure works and no one likes to rock the boat. Dont think anyone likes to be the short life hero which is quickly forgotten. Change the world is not an average manager motto

Edited May 9, 2017 by Staff69

[Kusje]

Everything being the same of course milk powder also more expensive here.

 

After we factor in all the costs of labour, marketing, storage, rental, higher profit margin etc

 

Is there anything here that is imported but cheaper than overseas?

 

Diapers and condoms also more expensive ah.

 

Even if the milk powder is manufactured here it doesn't mean it will be cheaper.

Coca cola also bottled here. Cheaper meh.

I think you missed my previous post so I will mention the key points again.

 

1. A lot of milk powder is manufacted in SG in the same line (same ingredients)

2.. Parallel imported powder is about 60% of the cost in SG

3. Parallel important also incur the same rental, transport (actually more since it has to go to Malaysia then come back), labor. Only difference is marketing cost and margins I guess.

 

So why is the milk 50 percent more expensive in SG. Where does the money go?

[Kb27]

Malaysia market is price sensitive. So any product for sale there have to be relatively low in price.

How to get to that price ?

Possibly distribution, marketing and product costs.

 

Product costs may mean lowering the content of more expensive material.

 

Like Milo, local vs Australian formula.

Why the big price difference ?

I think the answer is the cocoa.

The more expensive formula has more cocoa.

The cheaper formula may just have more cheaper sugar.

[Voodooman]

Distribution costs in Singapore is very high.

 

Look at the number of retailers and 24/7 accessibility etc that pushes costs up.

 

COE costs. Delivery workers costs whether in terms of higher cpf or foreign levy etc. It goes on and on.

We have COE and other big countries have additional freight expenses to get goods to retail shops all over the place.

 

While it is difficult to know if taxes and other costs play a part, I observed during a recent Australian trip a lot of imported stuffs are more expensive in Australia than in Singapore. As I moved to smaller towns in NSW, the price of these imported goods goes up.

 

Interestingly, I read recently that higher retail rent in HK, much higher than in SG, is actually supported by higher per sq ft sales, so things are not so straight forward. But for imported milk powder to cost 2-3x more in SG than in neighboring countries, it can't solely be attributed to higher distribution and business cost.

[Piyopico]

We have COE and other big countries have additional freight expenses to get goods to retail shops all over the place.

 

While it is difficult to know if taxes and other costs play a part, I observed during a recent Australian trip a lot of imported stuffs are more expensive in Australia than in Singapore. As I moved to smaller towns in NSW, the price of these imported goods goes up.

 

Interestingly, I read recently that higher retail rent in HK, much higher than in SG, is actually supported by higher per sq ft sales, so things are not so straight forward. But for imported milk powder to cost 2-3x more in SG than in neighboring countries, it can't solely be attributed to higher distribution and business cost.

Of course higher local distribution costs only account for half of the story.

 

There are much higher costs all over the spectrum from higher

Management costs at the local factory

Testing & Quality control

High costs of industrial complexes whether on rental or 30 year leases

Accounting

Compliance

Advertising

 

All these costs a lot more in Singapore. The material costs of that similac is probably less than 5% of the retail price.

 

Many of these are avoided by parallel or importers buy either buy excess stock or just ride on the established brands to move sales.

 

Wanna sell at Malaysia price? Can. Ask all along the chain to take Malaysia level pay. Not gonna happen. Powder milk just happen to be one of the many products that is world leading in prices cos let's not forget Singapore is the most expensive city in the world.

 

Itz really not difficult to explain. Just embarrassing for the minister to say it. I will not go into whether we ask for it by supporting the system etc cos that's another topic.

[Piyopico]

I think you missed my previous post so I will mention the key points again.

 

1. A lot of milk powder is manufacted in SG in the same line (same ingredients)

2.. Parallel imported powder is about 60% of the cost in SG

3. Parallel important also incur the same rental, transport (actually more since it has to go to Malaysia then come back), labor. Only difference is marketing cost and margins I guess.

 

So why is the milk 50 percent more expensive in SG. Where does the money go?

The difference is that the large MNCs carry a lot more costs across which the PIs may avoid and the large pay packages of the staff from the MNCs.

 

It could easily have been 100% more and looking at how prices have gone up.... we will reach there.

[Yewheng]

Thats how the local structure works and no one likes to rock the boat. Dont think anyone likes to be the short life hero which is quickly forgotten. Change the world is not an average manager motto

Edited May 9, 2017 by Yewheng

[Kopites]

Cuz many women in Singapore don't want to breastfeed. Overseas, those families that cannot afford formula will just breastfeed their kids. So they can't make formula milk too expensive or no one will buy.

 

 

How old are your kids? 1 year old can drink fresh milk already.

I myself only drank one small tin of milk powder. It was given to me free from KK. My mum said that tin last me about one month. After that i was on condense milk. Can't even afford or never drink fresh milk. Only ang mo living along bukit timah drink fresh milk.

 

Btw it was back in the 60s.

[Evillusion]

​I really dislike the part where no one like to rock the boat... this is the society we are in now. Everyone one cares about themselves.. NO good..

 

​Now they want to further tighten how they do the advertising, this is fine as long as it does not add further cost to them in compliance. I do not know how there are going to do that.

 

​True to a certain extend till there are economic of scale where improvenemt in technology and cheaper to produce.

Thays typical SG mentality....i have the purchasing power.....why should i care. We can see from cars to cable subscriptions! The prices of these items are out of this world and still sgians are happy to buy. The power that be and the business owners knows this amd milking it to the max. Where in the world can we find people boasting about how expensive they send their kids for tuitions, special classes and the milk they feed their child. Where can you find people congratulating others on their purchase of expensive bnb cars as if he had bought an exotic or luxury car (no doubt the price could have bought one overseas).......only in SG bro!

[Yewheng]

Thays typical SG mentality....i have the purchasing power.....why should i care. We can see from cars to cable subscriptions! The prices of these items are out of this world and still sgians are happy to buy. The power that be and the business owners knows this amd milking it to the max. Where in the world can we find people boasting about how expensive they send their kids for tuitions, special classes and the milk they feed their child. Where can you find people congratulating others on their purchase of expensive bnb cars as if he had bought an exotic or luxury car (no doubt the price could have bought one overseas).......only in SG bro!

Edited May 10, 2017 by Yewheng

[Nzy]

I myself only drank one small tin of milk powder. It was given to me free from KK. My mum said that tin last me about one month. After that i was on condense milk. Can't even afford or never drink fresh milk. Only ang mo living along bukit timah drink fresh milk.

 

Btw it was back in the 60s.

 

Nowadays most can afford fresh milk la. Lol. Anyway, if those who can breastfeed, breastfeeds. And all change to fresh milk after 1, I don't think the milk companies will dare to charge so much for formula anymore. But I guess most can afford so they don't bother.

[Evillusion]

Nothing wrong with rich have purchasing power, just that hope there will be more choice here that others will be able to benefit from cheaper milk powder.

 

Now we know who controlled the supplier, they are now going to see how to make it easier from other supplier to come into market.

 

http://www.channelnewsasia.com/news/singapore/more-formula-milk-options-to-be-made-available-amid-concern-over-8827050?view=DEFAULT

 

​If is just too MUCH regulations that killed the market that resulted in just few big players in the market. So few big players in the market and we will know what will happen...

There are actually many choices available.......just that the price are cut-throat.

Not saying i am envious of those who have the purchasing power but it is akin to sabotaging the others who doesnt have that. Its a strange SG traits that make us carrots in the eyes of these big corporations. But then again why should i care......

[Yewheng]

There are actually many choices available.......just that the price are cut-throat.

Not saying i am envious of those who have the purchasing power but it is akin to sabotaging the others who doesnt have that. Its a strange SG traits that make us carrots in the eyes of these big corporations. But then again why should i care......

Edited May 10, 2017 by Yewheng

[Kusje]

Malaysia market is price sensitive. So any product for sale there have to be relatively low in price.

How to get to that price ?

Possibly distribution, marketing and product costs.

 

Product costs may mean lowering the content of more expensive material.

 

Like Milo, local vs Australian formula.

Why the big price difference ?

I think the answer is the cocoa.

The more expensive formula has more cocoa.

The cheaper formula may just have more cheaper sugar.

I will take a photo of the label of my s26 bought from Malaysia later. You can compare it to the local supermarket ones and tell me what the difference is. The Malaysia one also says made in Singapore.

 

For distribution cost, you mean ntuc has a higher distribution cost than those neighborhood stores? Can't be right.

[Voodooman]

Nothing wrong with rich have purchasing power, just that hope there will be more choice here that others will be able to benefit from cheaper milk powder.

 

Now we know who controlled the supplier, they are now going to see how to make it easier from other supplier to come into market.

 

http://www.channelnewsasia.com/news/singapore/more-formula-milk-options-to-be-made-available-amid-concern-over-8827050?view=DEFAULT

 

​It is just too MUCH regulations that killed the market that resulted in just a few big players in the market. So only a few big players in the market and we already know what happen...

 

​Hope that with relevant agencies working out to reduce regulatory requirements, government can understand that too much regulations do hurt economy and also inflation. Where too much regulations will result in Small players unable to enter into market and left big players. Where there are only few big players.. there could be price control like cartel.. So 1st thing to do is to see how to make it easier for small players to enter into market by deregulation ..

 

Like allowing Sanlu milk powder to sell in SG?

 

Regulations are not all bad on its own as we all know what businesses, if left on their own, are capable of doing to privatize profit and socialize cost but too much regulation is also bad for business. everything is a balance. You however tend to think all regulations are not necessary and a free for all is the way to go. I find that too black and white when the real world does not operate that way and humans are gray at best.

 

You should watch "Inside Job" to see the flip side of finance deregulations in th US,

[Kb27]

I myself only drank one small tin of milk powder. It was given to me free from KK. My mum said that tin last me about one month. After that i was on condense milk. Can't even afford or never drink fresh milk. Only ang mo living along bukit timah drink fresh milk.

 

Btw it was back in the 60s.

 

Back in those days, my younger brother was on milk powder donated by USA, proudly printed on the cardboard packaging.

[Evillusion]

Actually it is not the rich sabotage others, it's more like too government regulations that sabotage the poor. Often too much government regulations will result in small players unable to enter market. This is not good..

 

Beside that, by reducing government regulations will actually make job easier for people working in government sector, plus can also reduce cost in government operations..

some goverment minds the small expenditures but wont mind losing $40 billions...

[Fcw75]

After some female MPs gave birth, suddenly milk powder become such a big issue?

 

Come on, we always know milk powder is expensive here already and many have went JB to buy.