The milk powder pricing formula has not been reimplemented since it was halted in 2021 with the removal of milk powder from the ‘specified foods’ list, a Consumer Affairs Authority (CAA) official revealed.

Speaking to The Sunday Morning, the official said that the pricing formula had been in place until former State Minister of Consumer Protection Lasantha Alagiyawanna had removed milk powder from the list of ‘specified goods’.

This order was gazetted on 8 October 2021 (as available on the CAA website). 

“This meant that the regulation on prices was removed. The formula can be implemented only if there is a price regulation. The Minister let go of this power in 2021,” the official said.

“This was due to the foreign exchange crisis. When we had price regulations at that time, the companies said they could not import as the rupee’s crash meant prices increased significantly during that time. There was a shortage of milk powder too and that is why the product was removed from the specified foods list and why the formula is not being implemented anymore.”

At a Committee on Public Finance (COPF) hearing on Friday (8) on milk powder prices, COPF Chairman Dr. Harsha de Silva questioned why the pricing formula was no longer being implemented. 

Officials present at the meeting and those who contacted de Silva via phone during the proceedings said that the formula had not been reviewed and renewed since 2019 and hence was not being implemented at present. 

The CAA official further noted that following the Covid-19 pandemic and the economic crisis, which led to a substantial increase in the prices of this essential good, many Sri Lankan consumers were no longer ‘brand loyalists,’ nor did they consume as much milk powder. 

The pricing formula had only been in use for imported milk powder. 

According to the official, there are no plans at the moment to reintroduce the formula.

De Silva had ordered the officials present at the COPF meeting to provide a report on the reasons behind the discontinuation of the pricing formula in 2019. 

The pricing formula for imported milk powder was introduced by the Ministry of Economic Reforms and Public Distribution under the former ‘Yahapalanaya’ Government. 

Attempts to contact Trade Minister Nalin Fernando and Trade Ministry Secretary A.M.P.M.B. Atapattu regarding the matter failed.