After milk, ice cream is set to get more expensive in the country. Ice cream makers are all set to hike prices in the range of 8-15 percent, said people aware of the development. The hike in price is primarily because of higher input costs, including that of skimmed milk powder, as well as overall inflation. This price hike is likely to be across the ice cream and frozen dessert portfolio.
Vadilal, the Gujarat-based ice cream maker, is likely to hike prices of its offerings in the range of 8-10 percent, while Amul is expected to raise prices by about 8-9 per cent, said people aware of the matter. Amul, which has hiked prices in the ice cream space after a gap of two years, confirmed plans for price hikes owing to inflation.
Ice cream makers have already passed on a portion of these price hikes and the remaining will kick-in during January. Mother Dairy too has passed on some price hike to consumers. “With the increase in input costs, we have partially passed on around 3-5 percent price hikes to consumers that too in some variants of the ice-creams’ take home range,” said a Mother Dairy spokesperson.
Prices of skimmed milk powder (SMP) have been on the rise for the last couple of months, having increased to Rs 330 per kilogram in December 2019 from Rs 230 per kg in September last year. This has put pressure on several ice cream makers.
“Last year average rate of SMP was Rs 150 per kg. The average rate of last 4-5 years ranges between Rs 180 to Rs 200 per kg. Last year, from January 2019 onward, rates increased day by day from Rs 180 to current rate of Rs 330 per kg,” the Indian Ice-cream Manufacturers’ Association (IICMA) said.
In a letter to the minister of fisheries, animal husbandry and dairying, the IICMA said, “As you may be aware that the country is facing an acute shortage of milk and SMP due to which it is expected that manufacturers of milk and milk products are going to face tough time ahead. Local prices of SMP have broken all records and all the manufacturers are feeling the heat even before the start of season.”
Recently, dairy players like Amul and Mother Dairy hiked milk prices by Rs 2-3 per litre owing to the extended monsoon and delayed onset of the flush season, the December to March period when milk supply is at its highest.
“This year the price of cattle feed has increased by more than 35 percent. Considering increase in cattle feed and other input costs, our member unions have increased milk procurement price in the range of Rs 100 to Rs 110 per kg fat which is more than a 15 percent increase than last year,” said Amul in a release last month.
Taking into account these issues, the Department of Animal Husbandry & Dairying will be meeting on January 3 to review the milk situation. The meeting will discuss availability of milk, pricing for consumers and the procurement price for producers. Members from co-operative and private dairies will be part of this meeting.