Manufacturers of 5 largest instant noodle brands in Thailand – Mama, Wai Wai, Yum Yum, Nissin and Suesat – had for the first time in 50 years grouped together to demand for price hike in line with inflationary production costs.
Earlier, Pun Paniangvait, Manager at the President’s office at Thai President Foods Plc, manufacturer of Mama instant noodles, said the 5 brands were scheduled to jointly submit a letter to the Internal Trade Department under the Commerce Ministry to ask for price hike from Bt 6 (US$0.16) to Bt 8 (US$0.22) per packet.
The other 4 instant noodle producers include Thai Preserved Food Factory Co, producer and distributor of Wai Wai instant noodles; Wan Thai Foods Industry Co, manufacturer of Yum Yum instant noodles; Nissin Foods (Thailand), manufacturer of the Nissin instant noodle brand; and Chokchaipibul, the manufacturer of the Suesat brand.
Rapid increase in prices of raw ingredients used in producing instant noodles such as palm oil and wheat have left manufacturers with no choice but to demand for price hike. According to various sources, prices of palm oil has tripled while wheat price has increase by almost 30% within one year. In addition, prices of other materials like garlic and chilli have also increased by 10-30% while packaging material cost went up by 10-15%.
As instant noodles is an essential consumer item, its price has been under the control of the Commerce Ministry. Prices of instant noodles had been adjusted only twice in 1997 and 2008.
Manufacturers complained of heavy losses incurred due to the low price and many had shifted their focus to the international market which is more lucrative.
Fukuoka Hijiri, Managing Director of Nissin Foods (Thailand) Co said, “We should be allowed to adjust the prices in line with higher production costs as we are allowed to do so in other countries. The price increase, once allowed, will help enable us to continuously develop our products to the market.”
Thailand’s Internal Trade Department is closely monitoring this issue and has admitted that the costs of certain raw materials for instant noodles have risen substantially, especially energy costs and key raw materials such as wheat flour. The department is reviewing the request of each manufacturer separately.
Meanwhile, Thailand Consumers Council (TCC) is calling on the government to ensure transparency as it mulls the request by the 5 manufacturers. TCC said the move should be supported by justifiable data. According to Saree Aungsomwang, Secretary-General of the TCC, “The companies post profits while drawing on ingredients which are price-controlled by the Department of Internal Trade. Since these prices have not gone up, she asked how the companies could claim their costs of production are higher.”
The TCC has also requested to be present during the department’s committee meeting when vetting the manufacturers’ request.
