The milk marketing companies in Pakistan have decided to increase the prices of packaged milk by PKR 10 per liter. This move has made it more difficult for the companies to achieve their sales objectives.
In the midst of social media campaigns claiming that packaged milk brands are unfit for human consumption and competition from loose milk sellers, this decision was not an easy one.
“Packaged [UHT] milk price has gone up by PKR 10 to PKR 130 per liter in retail. The increase is simply the pass-on of the price-hike made by multinational companies and nothing else,” Karachi Retail Grocers Group’s General Secretary Fareed Qurashi explained.
“Nestle and Engro announced the increase in their prices on July 7. The retail markets are gradually incorporating the price-hike with induction of new supplies,” Qurashi added.
Moreover, an official at Engro Foods has commented on the recent price hike and said that it was not an easy task to increase the price, especially at this point of time when companies are trying hard to achieve their sales targets.
“The industry’s sales had dropped by almost 30% after courts admitted a case against alleged adulteration in packaged milk months ago,” he said, adding that investigation later found those allegations to be false and based on misconceptions.
“We highlight here that Supreme Court conducted legal proceedings against some packaged milk brands for milk adulteration,” Engro Foods announced in a notice to the Pakistan Stock Exchange in April. “However, the Pakistan Council of Scientific and Industrial Research (PCSIR) termed six UHT milk brands fit for human health in January 2017” Engro clarified.
“We believe the incident must have made consumers skeptical towards the use of packaged milk, thus further putting pressure on sales,” the announcement concluded.
Therefore, it was natural for packaged milk marketing firms to pass the cost onto the customers. However, analysts believe that this move will temporarily affect the sales of packaged milk in the country and in the long run the effects of price hike will fade away.