Nguyen Anh Tuan, deputy head of the ministry's Price Management Agency, said the finance departments were asked to conduct checkups on the price registering and listing of power formula for children under 6.

It is also stipulated that milk companies not increase prices in cases where input expenses remain unchanged, added Tuan.

Tuan said that milk products are listed as commodities wSTC prices should be stabilised as required by the government.

If the milk producers want to hike prices, they have to report to the local department of finance on why, and by how much, prices should be increased, said Tuan.

"Meanwhile, if the producers are found hiking prices by a greater amount than the fluctuation of input costs, they will be fined."

The Price Management Agency has also requested that milk manufacturers not propose hiking the prices of the powdered milk for children under 6 years old in cases where input costs remain unchanged.

The agency also turned down the price hike proposal from the Nestle Vietnam Co Ltd

Of the three products wSTC prices asked to be increased, the agency only accepted one, said Tuan.

The NAN HA NWHB019-4 12x400gram product prices will increase by 12 percent as of March 1, as import prices for the product have risen by 25 percent, he said.

For the remainder, since import prices remain unchanged, the Ministry of Finance requires that selling prices be stabilised.

"It is unacceptable for manufacturers to hike prices of the well-consumed products to increase profits," stated Tuan.

Prices constantly surge

The last five months repeatedly saw both domestic and foreign milk manufacturers hiking their selling prices by up to 19 percent.

Initiating the upward trend for milk prices was Friesland Campina Vietnam Co, which raised its product prices by 4 - 15 percent in September 2011, with rising input cost blamed as the main cause. Dumex and Nestle followed suit, setting prices 13 percent higher.

In December 2011, Abbott and Mead Johnson, two milk manufacturers holding a large market share, announced price hikes of 7 percent, and 19 percent respectively for their products.

In January, Vinamilk took its turn to raise prices by up to 7 percent, followed by Anlene, which hiked prices by 10 percent earlier this month.

Milk dealers said milk prices used to be adjusted in the first or third quarter annually.

But currently, prices have shot up unpredictably, and manufacturers have made use of all excuses to increase prices, they said.