Milk prices likely to soar by Rs 3 across Maharashtra in coming days
While announcing the hike in the procurement price on June 19, dairy development minister Mahadeve Jankarhad had said action would to take action against brands if they increased their retail pricesmumbai Updated: Jul 31, 2017 07:42 IST
A month after the state rose the procurement price (paid to farmers) by Rs3 for cow milk and announced there would be no rise in the retail price of milk, a key player in market, Gokul, has increased retail price by Rs2 per litre. Other private brands, which together hold 58% of the market share of packaged milk, are likely to do the same in the next few days.
Gokul, which supplies about 10 lakh litre milk a day across Maharashtra, said the new price will be applicable from August 1. The company has said it was forced to hike its prices after the upped the procurement price last month.
“After the rise in the procurement price, we incurred a loss of Rs3 crore in just five weeks. It is difficult to sustain the loss and had to resort to price hike,” Dattatray Ghanekar, managing director, Gokul told HT.
While announcing the hike in the procurement price on June 19, dairy development minister Mahadeve Jankarhad ha said action would to take action against brands if they increased their retail prices. However, the private and cooperative brand owners claimed that the government has no right to take any action against them for increasing prices.
“The rise in the procurement price was applicable to the government and cooperative brands and we have ensured that all of them abide by the notification. We had to initiate action against six cooperative milk unions a few weeks ago,” said Vikas Deshmukh, secretary, dairy development department. “There would be not control over the prices of the private brands, but with the 70:30 formula of profit sharing on our card, the retail prices may be brought under control in the future.”
While 58% market share is with private players such as Amul, Gokul and Krishna, 40% share is with the cooperative brand such as Mahananda. The remaining 2% is Aarey, owned by the government. The retail price for cow milk ranges between Rs42 and Rs45 a litre.
Like Gokul, other private dairies too are set to increase their prices. “We have been sustaining a loss of Rs 1.5 to Rs 2 a litre after the rise in the procurement price. Though the state government warned us to not increase the retail prices, it is very difficult to survive without rise as the overheads are no more sustainable. We will also take a call on the price rise very soon,” Vinayak Patil, chairperson of Rajarambapu Patil Sahakari Dudh Sangh, which owns the brand Krushna, said.