Milk importers have ?won their case? in the trial of strength with the minister of Trade, Rajesh Jeetah. The latter has accepted to review their profit margin upwards. Although they consider it is still ?insufficient?, they admit that they will no longer be selling at a loss. New Zealand Milk even said that the ?35 employees who had lost their jobs have been reemployed since Monday.?

As soon as the minister of Trade started his mandate, he made it clear that he would cut down all exaggerated profit margins on a few products, including powdered milk. He did not hesitate to control prices and bring down the importers? profit margin from 41% to 14% despite their protests. They kept saying they would not be able to meet production costs (especially packing) and warned they would have to make some of their staff redundant ? which indeed happened a few weeks later.

But the minister stood his ground and insisted that the importers comply. But market realities have outdone the government?s determination and it has finally had to give in. It has accepted to increase the profit margin to 24% for milk in laminated packing and cardboard boxes. As for Amul milk, imported from India by the State Trading Corporation, the price will remain the same at Rs 92,50 per kilogram. The fact that the price of this milk, which was supposed to be far cheaper than any other trademarks, did not meet public expectations may also have played an important role.

As some ministers had never supported Rajesh Jeetah?s decision, the prime minister, Navin Ramgoolam, finally decided to take up the issue. He may have been worried about the pressure of an eventual shortage?