Leading private dairy companies have hiked prices of branded milk and dairy products in line with the hike in input costs, according to industry sources.

The companies have announced a Rs 2 hike per litre of milk.

Consumers will pay Rs 38 a litre for standardised milk against Rs 36 previously and Rs 42 a litre (Rs 40) for full cream milk.

The hike has been announced by leading brands including Tirumala Milk, Dodla Dairy, Jersey Dairy and Heritage.

According to a senior executive in a dairy, the hike is in line with the increasing prices of raw materials and input costs.

Dairy companies are looking at offsetting the higher procurement costs of milk purchased from dairy farmers.

Procurement prices went up by Rs 3 a litre this year in Tamil Nadu with Aavin announcing it will pay dairy farmers Rs 23 a litre for cow’s milk and Rs 31 for buffalo milk. But the cooperative has not hiked the sales price because of its deep pockets and Government support, according to industry sources.

However, the cooperative had hiked prices of dairy products significantly from January 1. For instance, prices of ghee and butter went up by Rs 60-80 a kg and prices of most other dairy products had also been hiked.

Private dairies are working on thin margins and the hike in raw material has to be met with viable sales price. Also, the dairy sector is entering the lean season and there will be increased competition for sourcing milk. This will certainly add to the cost, according to industry sources.

balaji.ar@thehindu.co.in

(This article was published on January 19, 2014)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.