Benna has increased the price of some of its milk and milk-based products by up to 15%.
A company spokesperson confirmed it was raising prices from Saturday but declined to provide details of those increases, saying prices were only communicated to retailers.
Times of Malta visited three retailers in Gżira on Saturday morning. While two said they had yet to update Benna products with new prices, a third had new, increased prices on display.
A one-litre carton of full-fat milk retailed for €1.23 instead of the previous €1.15 – a 7% increase. Semi-skimmed and lactose-free milk prices were up by 5c while skimmed milk prices were 2c higher.
Benna's Pro Milk was retailing for €1.83, representing a 15% increase over its previous RRP.
MDP blames rising costs
The price increase comes just over a year after Benna last raised its prices and is the third such increase in the past two years.
Malta Dairy Products, the consortium behind local dairy brand Benna, said it was forced to raise prices due to an increase in costs.
“Rising costs in key areas, such as raw materials, supply chain logistics, and global inflationary pressures, have made it necessary to adjust prices to ensure we can continue providing the best dairy products,” the company said in a statement.
It cited the cost of cocoa – used in Benna’s chocolate milkshakes and dessert yoghurts – as a case in point.
Cocoa markets have exploded over the past 18 months and prices for the commodity are now roughly five times what they were in 2023.
MDP claimed it was absorbing some of these rising expenses and not passing on “the full extent of these cost increases to customers”.
MDP registered a €614,000 profit after tax in 2023, according to audited accounts filed with the company registry, with revenue up and costs of sales down when compared to a pandemic and war-hit 2022.
That year, the company also received €1.3 million in taxpayer money as part of a dairy aid scheme intended to help herdsmen cover inflationary pressures caused by the war in Ukraine.
Still, company directors warned that the company faced challenges from external factors outside its control, with rising production costs and a “significant” decline in milk prices in the second half of 2023.
Tensions with government
The company is a joint venture between the Milk Producers’ Cooperative, which is made up of approximately 81 local herdsmen, and the government, with producers appointing five board members to the government’s two.
When the company last raised prices in December 2023, the Agriculture Ministry had reacted angrily and said it would be asking the competition regulator, the MCCAA, to investigate.
It is not known whether that probe ever kicked off. When the MCCAA investigated Benna for a similar price hike in 2019, it concluded that the company was justified in raising prices.
There is understood to be significant tension between the MDP's two stakeholders, with the government believing the milk producers' cooperative - the majority shareholder - mismanaged the business in the pre-COVID period and failed to reinvest profits into the business.
The government also wants the MDP to move out of its main factory, located in the heart of Ħamrun, to make way for a large park it promised as part of its 2022 general election campaign. The MDP is understood to be resisting the move unless it obtains financial aid to build a new plant.
Benna's announced dairy price increases cap a challenging week for consumers' cost of living: bottle recycling firm BCRS has said it is raising administrative fees for producers and importers, prompting a concerned reaction from the government, and telecoms firm GO said it would be bumping up the price of its cheapest broadband package, albeit while also increasing download speeds.
GO's main rival, Melita, had introduced a similar price increase last summer.