Milk crisis looming

By Shezna Shums

The quantity of milk collection has reduced following the death of a large amount of cattle and disruption to the infrastructure for rearing cattle and collecting milk for national consumption.

Director General of the Department of Animal Production and Health A.D.N. Chandrasiri told the Daily FT that a large number of animals had died following the rains that lashed several districts around the island and the floods that followed.

“The cattle, buffalo, goat, pig and poultry population all suffered a blow following the recent rains,” said Chandrasiri. “This will definitely affect the country and milk production as well as other areas,” he added.

The Department of Animal Production and Health is still quantifying the loss of animals in the districts affected by rain, floods and landslides. Meanwhile, the department is also helping animal farmers restart their farms and buy animals.

The Eastern, North Central and Central Provinces recorded several deaths of animals. Furthermore the Director also said that there are isolated animals in the affected districts that are not able to get food or be milked and these animals too will come into more difficulty.

Chairman of Milco Private Limited Sunil Wickramasinghe highlighted that Rs. 100 million worth of animals had perished due to the rains and floods. Seven chilling facilities in the Eastern Provinces were damaged owing to the rains and four of them had gone under water.

“We cannot collect fresh milk from these disaster affected areas,” said the Chairman. “We are badly affected and this will also affect our production line.”

Wickramasinghe explained that the calving season is from November till about February and since these animals have now perished, it would affect production.

“The current loss of fresh milk collection is about 20 to 30 per cent. What is now needed is a revamp of the whole thing,” he noted. “This loss of animals and facilities cannot be recovered overnight; so it will take some time and this loss will affect in the long run.”

Meanwhile, Nestlé External Affairs Manager Bandula Egodage revealed that they had noticed an 18 to 20 per cent decrease in milk collection during the last few weeks due to the heavy rains and floods.

Nestlé nevertheless continues to carry out its fresh milk collections, although it has been halted in the districts which have been badly affected since farmers have been displaced and cattle destroyed.

Along with the fact that the number of cattle and other animals has reduced, other factors are also contributing to the reduced milk collection.

Transportation facilities have been affected, thus proving a problem to transport the fresh milk that is available to the chilling facilities. The lack of electricity has also prevented chilling facilities from operating. The electricity supply to some areas was stopped during the rains and floods in order to prevent electrocution occurring and fires from breaking out.

In addition, some of those in the industry have been displaced and their premises have also been damaged.

“‘There is a basic chain of reaction taking place which is all adding to the disruption in the milk industry,” Egodage explained.

He added that since the milk collection had reduced, Nestlé’s production line was also affected.

However, the crucial problem here is that once a farmer loses a cow, the recovery of his livelihood will take some time and cost the farmer financially. Many cattle, buffalo, goat, swine and poultry farmers not only lost their farms but will also have to rebuild their homes and purchase other possessions once again.

Rearing the animals from the start again will also collectively affect the outcome of the country’s milk supply, until the numbers of animals rises to meet the country’s demand of both milk and meat.

Importers call for milk price hike

Milk powder importers are requesting a price increase from the Government. The request is to increase the cost of a 400 gram packet of milk powder by Rs. 33 and an increase of Rs. 82.50 for a kilo of milk powder.

This request comes despite the Government reducing the import levy on milk powder by Rs. 22 per kilo from Rs. 50 per kilo.

This move was taken to keep domestic retail prices of milk powder low despite world milk powder prices increasing.

The country mainly depends on imports for its milk food needs as local production meets only 35 per cent of the need.

The request comes in the wake of increasing world prices of milk powder, Fonterra Brands Director of Human Resources and Corporate Roshan Kulasuriya said. With a tonne of milk powder costing over US$ 4,000 and the price still rising other milk powder importers also want an increase, said Kulasuriya.

The request was made to the Consumer Affairs Authority, which comes under the purview of the Ministry of Cooperatives and Internal Trade.

Fonterra goes to Court against Maliban Milk

By S.S. Selvanayagam

The Colombo High Court issued an Enjoining Order against Maliban Milk Products (Pvt) Ltd., preventing it from using any packaging, trade dress or get-up for its ‘Hi-Cal’ milk product identical and confusingly similar to the ‘Anlene’ milk product of Fonterra Brands Lanka (Pvt) Ltd.                       

High Court Judge Mahinda Samayawardane issued this order operative till 23 February on intellectual property litigation sued by Fonterra Brands Lanka (Pvt) Ltd. against the Defendant Maliban Milk Products (Pvt) Ltd.

Romesh de Silva PC with Sugath Caldera and Manoj Bandara instructed by Sudath Perera Associates appeared for the Plaintiff Fonterra Brands Lanka (Pvt) Ltd.

Plaintiff pleads it is engaged in the business of importing, manufacturing, packaging, distributing, advertising, marketing and selling dairy products in Sri Lanka under several brand names including milk powders ‘Anchor,’ ‘Ratthi’ and ‘Anlene’ as well as ‘Newdale’ yoghurt and pasteurised milk.

The Plaintiff Company, which is a company in the Fonterra Group of Companies headquartered in New Zealand, stated that Fonterra developed Anlene High Calcium milk powder as a value added milk product specially designed to help in good bone health.

Anlene is formulated for adults and is enriched with a superior combination of essential bone nutrients such as calcium, vitamin D, magnesium, zinc and protein, it stated.

It pleads that the “Anlene” brand is sold in nine countries in the South East Asian Region, namely Malaysia, Indonesia, Philippines, Thailand, Vietnam, Hong Kong, Taiwan, Singapore and China.

It claims that until December 2009 it was the only manufacturer, distributor and seller of a high calcium milk powder product in Sri Lanka with a significant presence in the market.

It stated that it had to spend vast sums of money in advertising and promotion of its new Anlene product to create a market for the product and educate the consumers on good bone health.

The Anlene trade dress/get-up at the time of its introduction in 1998 was originally created for it and this pack went through development and evolution over a period of 13 years to what it is today, it said. From 2006 to 2010, it claims it has spent Rs. 470 million for advertising and promotion of its Anlene milk products.

In December 2009, it says it noticed that a high-calcium milk product called Maliban “Hi-Cal” had been introduced to the market by the Defendant. It pleads that the use of the words “Hi-Cal” as a brand name is wrongful and unlawful and that the said “Hi-Cal” high calcium milk powder of the Defendant was sold in packages which are similar to its “Anlene” pack.

Plaintiff Fontarra complained the Defendant copied its “Anlene” pack design at the time to market its “Hi-Cal” product, to piggy back on the reputation of its “Anlene” product and in a deliberate attempt to confuse and mislead the consumers.