ITC Ltd is set to hike milk prices later this week, partially passing on the rise in input cost to the consumer. The company, which operates a fresh dairy business in the East, especially Bengal and Bihar, will follow in the footsteps of the market leader, Amul.
The rise is likely to be in the range of Rs 2 a litre even as the company said it has not decided on the extent of the hike. “We will do it in next few days. There is no option but to partially pass on the rise in fresh milk procurement cost,” Sanjay Singal, chief operating officer (dairy and beverages) of ITC Ltd, said.
ITC, which launched an easy digest variant of the Ashirvaad Svasti milk brand for lactose intolerant consumers, procures about 60,000-70,000 litre of milk from 10,000 farmers a day.
The company estimated the cost of procurement has gone up by Rs 3/4 a litre in the recent months on the back of rising feedstock cost, the biggest input for farmers.
The last price increase was taken in June 2021, when the raise was Rs 2 a litre. Producers are retailing milk at Rs 25 for a 500 ml pouch. ITC will focus on growing the dairy food business in the East. The company ventured into the fresh milk segment four years back.
While fresh products are limited to the eastern region, packaged items such as ghee and milk shakes are available nationally. Singal said the company was pleased with the performance of the dairy business so far. It sells about Rs 6 crore packets of milk and lassi in Calcutta on an annual basis.
