ITC to hike milk price in order to pass on procurement cost to consumer

Firm silent on extent of hike, says farmers faced cost push in the past nine months, which in turn led to an increase in procurement prices by Rs 3-4 a litre for the company

Diversified conglomerate, ITC, will be hiking milk prices over the next few days, to pass on increased cost of procurement from farmers, partially.

Sanjay Singal, Chief Operating Officer–Dairy & Beverages, ITC, said that in the past nine months, farmers faced cost push, which in turn led to an increase in procurement prices by Rs 3-4 a litre for the company.

“Hence manufacturers have decided to pass on the price partially,” he said. The last price increase was in June 2021, which again was Rs 2 per litre.

Singal did not specify the extent of the increase that was in the offing, but market leader, Amul, reportedly increased prices by Rs 2 per litre. ITC sells fresh milk in West Bengal and Bihar.

The fresh dairy segment of ITC was born about four years back in Bihar and then expanded to West Bengal. In West Bengal, it is available in nine districts while in Bihar, it is present in 30 districts.

ITC has three milk processing plants – at Munger and Patna in Bihar and Howrah in West Bengal. Apart from milk, ITC’s fresh dairy segment includes curd, paneer and lassi.

Singal said that over the next few years, the company would focus on the East. “East India is a very large market and we choose to be here at least for the next few years,” said Singal. Moreover, organised dairy production is about 20 per cent.

Singal pointed out that in the fresh dairy space, there is no national player as it is linked to milk sourcing. While in the fresh dairy segment, the company’s presence is limited to West Bengal and Bihar, Singal explained that ITC is a national player in the overall dairy space, with its milk shakes and ghee available in different parts of the country.

On Wednesday, the company announced the launch of lactose-free milk in pouch, Aashirvaad Svasti ‘Easy Digest Milk’ in West Bengal.