THREE Chinese dairy producers are reported to be looking at a price increase for their milk products next year despite safety fears over a scandal involving one of them, and an analyst has claimed that price rise is to generate more sales amid the festive season shopping.

Supermarkets in Beijing have received oral or written notices of price increase from major dairy producers like Mengniu, Yili, and Sanyuan, and the increase is 1-2 yuan for each box of products, The Beijing News reported yesterday.

Shanghai supermarkets have so far not confirmed the possible price rise. A media officer at Yili told Shanghai Daily there won't be any price change in Shanghai for the time being. A Mengniu sales company official denied to Caixin magazine any price hike.

French retailer Carrefour said it hasn't heard about any price hikes from its dairy suppliers since prices of some Mengniu and Yi products were raised 10 percent a month ago. China's NGS supermarket and the US-based Wal-Mart also dispelled talk of a new round of price increases.

The latest news came months after foreign dairy producers like Wyeth raised prices of their high-end infant milk powder, and also after Chinese consumers chose to foreign brands of milk powder as China's new dairy standard came under fire as being below international norms.

Dairy expert Wang Dingmian said the planned price increase would occur amid damaged consumer confidence over the latest food safety scandal involving a batch of carcinogen-tainted milk produced by Mengniu that was reportedly sold after a denial by the Hong Kong-listed company.

"Given the fact that the new-year shopping season is around the corner, the price hike is to help chalk up better sales figures," Wang said.

He dismissed the price hike is driven by rising raw milk and packaging costs as the market situation is the opposite. The reason for the "perfect timing" of the hike is for the firms to earn profits hurt by inflation, he said.