Packaged milk prices increased massively; check new rates

As of July 1, 2024, Pakistani consumers will be forced to dig deeper into their pockets to purchase packaged milk, with prices set to increase by up to Rs75 per liter due to the introduction of an 18% General Sales Tax (GST) in the recent budget

The step has sparked concerns among industry insiders, who warn that the proposed sales tax could have disastrous consequences for the formal dairy sector, potentially shrinking it by over 70% if not withdrawn.

The impact of the GST is already being felt, with FrieslandCampina Engro Pakistan Limited, the company behind the popular Olper’s brand, released a new price list reflecting the increased costs.

The price of each 250ml pack for retail customers has risen to Rs95, with a carton box priced at Rs2,660 for Ecolean products and Rs2,565 for TBA products.

Additionally, the price of each 100ml pack has increased to Rs370, with a carton box now costing Rs4,440. The 1500ml packs are now Rs535 each, with a carton box priced at Rs4,200, effective from July 1, 2024.

The price hike comes at a time when Pakistan is already grappling with serious malnutrition issues. Despite being one of the world’s largest milk producers and consumers, the country faces a significant challenge in providing adequate nutrition to its citizens.

Dairy sector responds

According to reports, 40% of children in Pakistan suffer from abnormal height, 29% are underweight, and 18% are scrawny. Currently, about 90% of Pakistan’s over 240 million people consume fresh unprocessed milk, while only 10% use packaged milk.

The introduction of the 18% GST on packaged milk is likely to exacerbate the existing nutrition challenges in Pakistan. With the price of packaged milk increasing significantly, many consumers may be forced to opt for cheaper, unprocessed milk alternatives, which could have negative implications for their health.

The formal dairy sector, which is already struggling to compete with the informal sector, may also suffer as a result of the GST, leading to a decline in the quality and safety of milk products available in the market.