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8 February 2018

NTUC FairPrice’s efforts to moderate formula milk prices yield positive results

  • Two new infant milk formula brands introduced exclusively to FairPrice last year have seen customers switch over from higher-end brands to more affordable alternatives
  • FairPrice’s efforts have seen the overall weighted average price of infant milk formula decline

SINGAPORE, 8 February 2018 – NTUC FairPrice (FairPrice) today shared developments on its efforts to address rising prices of formula milk, following the Government’s call in early 2017. In line with this, FairPrice rolled out two quality and affordable formula milk brands, FairPrice Gold and Australia’s Own, last year, which saw more than 50 percent of purchasers for these two brands switching over from higher-priced brands[1]. Overall, FairPrice has seen the weighted average price per pack of formula milk decline by 2.6 percent to $47.12 from $48.37, since these two formula milk brands were introduced last year.

Mr Seah Kian Peng, CEO, NTUC FairPrice said, “FairPrice shares the concerns of parents on the cost of formula milk. We take a proactive and holistic approach by working with the government and industry partners to provide choices and empower parents with access to affordable formula milk. The results have been encouraging; we are seeing a positive uptake on affordable formula milk brands with parents becoming more informed, as well as a general decrease in the overall prices of formula milk.”

Commenting on the FairPrice’s efforts, Dr Koh Poh Koon, Senior Minister of State, Ministry of Trade and Industry and Ministry of National Development, said, “NTUC FairPrice has been supportive of the Taskforce’s efforts to provide more affordable choices of formula milk for consumers who are not able to provide their babies with breast milk for various reasons. It is encouraging to see that some parents are already enjoying cost savings by switching to these options. I hope their experiences, together with our ongoing public education and outreach efforts, will give those who need to purchase formula milk greater peace of mind to select the option that best meets their family’s needs.”

Consumer shifts towards more affordable infant milk powder

The latest findings have also seen customers shifting away from higher-priced to mid- and lower-priced formula milk products. As of December 2017, higher-priced brands have seen an 8.5 percent decline in proportion of total formula milk sales at FairPrice, while mid- and low-priced priced formula milk sales have increased in proportion by 6.2 percent and 2.2 percent respectively [2] [3] .

These efforts to moderate prices have also spurred existing suppliers to offer more affordable options to customers. For example, in August last year, Abbott introduced three new value packs that provide better savings. The 2.4kg cardboard value packs available for Similac Gain Stage 3, Similac Gain Stage 4, and Pediasure, are priced more affordably at 20 per cent cheaper than regular packs.

FairPrice-exclusive affordable formula milk brands introduced in 2017

Last year, FairPrice worked with the authorities to source and bring to market FairPrice Gold formula milk and Australia’s Own, two high quality formula milk brands exclusive to FairPrice, that provide essential nutrition for infants while priced affordably.

FairPrice Gold formula milk was launched in September 2017, and is available in three variants for children of different ages, priced between $27 and $29 for a 900g tin. In June 2017, FairPrice also made available the Australia’s Own Gold and Diamond range of formula milk, in three variants each, priced between $27.50 and $35 for a 900g tin.

These products complement over 150 other varieties of formula milk available at FairPrice stores, spanning different brands, formulations and pack sizes ranging from $22/kg to $97/kg.

Ensuring all segments of the community have access to infant formula

FairPrice initiated a number of initiatives to make formula milk more affordable for families in Singapore last year. In February 2017, FairPrice partnered with the various Community Development Councils (CDCs) in Singapore to launch the $1.5 million NTUC FairPrice Foundation-Milk Fund, targeted at low-income families to alleviate the cost of purchasing formula milk for their children. More than 7,500 children benefitted from this scheme last year.

In May 2017, FairPrice also announced the launch of the FairPrice FairMily Kit, a $14 million initiative to celebrate the birth of all Singaporean babies over three years, anticipated to benefit 35,000 babies each year, as part of the NTUC Good Start Bundle. Each Singapore citizen baby born between January 2016 and December 2019 will receive a FairPrice FairMily Kit containing $100 worth of baby and family-related products, including a tin of formula milk.

Awareness and education on infant formula

To enhance public education on children’s nutritional needs, collaterals on formula milk nutrition are available in-store and shared online and on social media to help parents make more informed choices. 

Other initiatives include loyalty programmes, LinkPoints and membership rebates to help parents stretch their dollar further.

[END]


[1] Based on data collated from close to 5,000 NTUC Plus! members who bought FairPrice Gold and Australia’s own formula milk between 15 June to 31 December 2017

[2] Formula milk price bands (calculated based on weighted average price): Higher - $41.70/kg and above; Mid - $27.50/kg - $41.60/kg; Lower - $27.40/kg and below. 

[3] Based on data collated from over 140,000 NTUC Plus! members who bought any brand of formula milk between 15 June to 31 December 2017

 

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