CHENNAI: Milk just got a wee bit dearer for consumers in the State. Six private milk companies - Arokya, Cavin’s, Vijay, Chakra, Amirtha and Jeppiaar - have increased retail prices of half litre packets of normal milk by Rs 1.
According to the companies, the price increase has been driven by an increase in procurement costs across the State by Rs 3 per litre.
The hike has seen milk prices for privately marketed milk in the State cross an MRP of Rs 36 per litre for double toned milk, which is Rs 2 more than that of Aavin, and Rs 42 for toned milk, which is Rs 5 more than Aavin.
According to the Tamil Nadu Milk Dealers and Employees Welfare Association (TNMDEWA), the price increase has been implemented across the board in most private firms, with one more firm expected to hike rates by Saturday morning.
According to A Ponnusaamy, president, TNMDEWA, the price increase was unwarranted because there had been no increase in procurement rates across the State. The industry, however, has strongly refuted the allegation. Industry sources said that the price increase was begun by market leader Hatsun, which decided to increase retail rates by Rs 2 per litre with a Rs 3 per litre increase simultaneously in procurement rates for farmers.
“The industry is a highly-competitive one and we cannot afford not to pay what someone else is paying. Otherwise, we will not be able to procure milk,” said Vidhya Madan Mohan of Vijay Milk. “We have increased procurement rates in line with the industry. The procurement rate increase is a recent development and has been followed by an increase in retail prices.
The business is a high-volume, low-margin one and we can’t afford not to increase the rates,” said R Balakrishnan, managing director, Chakra Milk.
The rate increase is also seen by the industry as price correction.
The current rates of milk, post hike, are the same as those that ruled in July 2015.
“The price is a correction according to the prevailing demand-supply environment. Companies reduced rates in July, because there was a glut in supply. Now, the glut has stopped and companies have increased procurement costs and consequently, retail costs,” said an industry source.