The Ministry of Commerce and Industry's competition council has warned seven local and international firms that they face severe penalties for illegally raising the price of baby milk powder.
They have been given two weeks to rectify various violations uncovered by the ministry or face the full force of the law, according to a recent report. These firms produce and import infant milk formula.
They could be penalized 10 percent of total sales, in addition to returning all profits from the illegal price increases. Penalties could be increased for repeat violations.
Penalties for companies involved in extraordinary cases range from SR5,000 to SR50,000. They could also be ordered to pay back price differences, have their stores closed for three days to one month and goods confiscated.
This comes after the ministry visited 10 offices of these firms in Riyadh and Jeddah. Teams took statements from company officials and gathered documents.
The ministry uncovered various violations in marketing practices, administrative decisions and agreements and contracts.
Sellers and pharmacy workers in Dammam said recently that there are around 15 companies supplying the market with local and imported infant milk formula at varying prices. They said price increases occur almost every month, depending on the volume of the containers. Cans of 400 grams are increased by SR2 to SR3, while containers weighing 900 grams have risen by SR15 to SR20.
Cans weighing 400 grams are priced at SR29 or SR37, while containers weighing 1,800 grams are priced between SR108 and SR130.
Workers said customers buy a 400-gram can for SR29, but would then pay SR5 extra for the same weight on another occasion.
They said these repeated increases create complications for pharmacies because they have to adjust their sales systems continuously.
Companies face sanctions for raising baby milk prices
