Boston, MA -- (ReleaseWire) -- 06/27/2014 -- Drinking milk as the main subsector of this category has been subsided by the Iranian government for many years. However, during the last months of 2010, a considerable proportion of subsidies were eliminated by the Iranian government. First, it was planned that the government had to pay the eliminated subsidies to the key suppliers in order to prevent price increases. However, in reality, no money was paid to the manufacturers. Currently, manufacturers have to buy milk from husbandries with a price of almost IRR13,500 per litre, but final consumer price for fresh milk is around IRR13,000. This resulted in a dramatic decline in the profit margin for manufacturers (almost 0% or even negative). The Iranian government plans to pay subsidies to the manufacturers so they can maintain profitability but these payments usually do not happen on time and this has made things very difficult for milk manufacturers.
Competitive environment for drinking milk remained consolidated in 2013 and several key manufacturers effectively covered most of the country. State owned Pegah Dairy Co, with subsidiaries in most of the provinces, remained as leader accounting for approximately one-third of total drinking milk value sales. The company is mainly active in fresh pasteurised milk and benefits from a wide distribution network. A total of 17 companies are responsible for the processing of raw milk and other dairy products, while 27 other companies are responsible for sales and exports. These companies form the largest distribution chain of dairy products in the country.
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The future prospect for drinking milk products is not clear for all of the categories. While simple fresh milk might continue to decline in volume due to the removal of subsidies, a more stable situation in terms of unit price can result in growth in consumption for this category. Non-subsidised milk, like UHT and flavoured milk, which have a very low base, might continue to grow at a rapid pace. Overall, drinking milk is expected to see a volume CAGR of 4% which is much higher than the negative review period CAGR of 5%. It is important to note that the unique situation of 2012 and 2013 (due to sudden rise in unit price) had a very negative impact on the review period CAGR.
Discover the latest market trends and uncover sources of future market growth for the Drinking Milk Products industry in Iran with research from Euromonitor's team of in-country analysts.
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The Drinking Milk Products in Iran market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Drinking Milk Products in Iran?
- What are the major brands in Iran?
- How are volatile farmgate prices for milk impacting retail prices and sales performance?
- What are the market opportunities for ethically sourced dairy items?
- Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
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Product coverage: Flavoured Milk Drinks, Flavoured Powder Drinks, Milk, Non-Dairy Milk Alternatives, Powder Milk.
Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data.
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