Serbian milk cheaper in Podgorica than in Belgrade

Serbian dairies' milk is more expensive in the country than abroad, it has emerged. Notwithstanding the fact that they have additional expenses transporting their products to Montenegro and paying taxes and duties, Imlek sells a liter of its standard pasteurized 2.8 percent fat milk for some 20 eurocents less in Podgorica's stores than it does in Belgrade. Serbian milk cheaper in Podgorica than in Belgrade The milk with higher content of fat, as well as various kinds of yoghurt, are also more expensive in Serbia. Analysts believe this is due to the fact Serbia's leading dairies have formed a monopoly in the domestic market, meaning that they can set the prices without worrying about competition, unlike in the Montenegrin market, where domestic, but also Croatian and Slovenian dairies all sell their products. But Salford, a company that owns most of the largest dairies in Serbia, including Imlek, Novosadska, Suboticka, Zemunska, and Impaz, say they occupy "only 37 percent of the market" and are therefore not in breach of monopoly laws. Salford also say unrealistically low euro exchange rate, lower VAT on dairy products, "somewhat lower margin of profit" taken by Montenegrin retails, are all valid explanations for the economic phenomenon. Producers blame last summer's drought for the recent hike in the prices of dairy products in Serbia. But their free hand at forming prices means that the effects of the drought will be suffered by farmers and customers, rather than producers. In the meantime, Serbia remains plagued by monopolies in many sectors, but also perhaps more importantly by poor antitrust legislation, which according to experts fails to clearly define what constitutes for a monopoly and how to sanction it.

Serbian milk cheaper in Podgorica than in Belgrade

The milk with higher content of fat, as well as various kinds of yoghurt, are also more expensive in Serbia.

Analysts believe this is due to the fact Serbia's leading dairies have formed a monopoly in the domestic market, meaning that they can set the prices without worrying about competition, unlike in the Montenegrin market, where domestic, but also Croatian and Slovenian dairies all sell their products.

But Salford, a company that owns most of the largest dairies in Serbia, including Imlek, Novosadska, Subotička, Zemunska, and Impaz, say they occupy "only 37 percent of the market" and are therefore not in breach of monopoly laws.

Salford also say unrealistically low euro exchange rate, lower VAT on dairy products, "somewhat lower margin of profit" taken by Montenegrin retails, are all valid explanations for the economic phenomenon.

Producers blame last summer's drought for the recent hike in the prices of dairy products in Serbia. But their free hand at forming prices means that the effects of the drought will be suffered by farmers and customers, rather than producers.

In the meantime, Serbia remains plagued by monopolies in many sectors, but also perhaps more importantly by poor antitrust legislation, which according to experts fails to clearly define what constitutes for a monopoly and how to sanction it.