Packaged milk producers increase prices

Updated February 27, 2020

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A Nestle official says the price hike to rising input costs, high transportation charges. — AFP/File
A Nestle official says the price hike to rising input costs, high transportation charges. — AFP/File

KARACHI: Tetra milk producers on Wednesday increased prices of one, 1.5 liter and 250ml packs without citing any reason for the increase.

Karachi Retail Grocers Group General Secretary Farid Qureishi said the price of one and 1.5 litre milk packets have been raised to Rs150 and Rs200 from Rs140 and Rs180 respectively whereas the 250ml pack will now be sold at Rs38-40 as against Rs35.

Qureishi said the price list issued by the companies did not mention any reason for the increase.

A Nestle Pakistan Limited official, while speaking to Dawn on the condition of anonymity attributed the price hike to rising input costs, high transportation charges on account of diesel rates and packaging rates.

He said the animal feed costs had also gone up because of rising soybean prices. The share of animal feed in milk production cost is 65 per cent.

Overall net sales of the Nestle Pakistan dropped to Rs116 billion in 2019 from Rs120bn in 2018 while it was Rs125bn in 2017, he added.

Highlighting the reasons of sales drop, Nestle in a statement said that challenges in the economic and business environment had impacted purchasing power of people, while during the year, imposition of sales on milk powders and federal excise duty on beverages also necessitated adjustment in prices.

Due to deteriorating purchasing power of consumers and competitive pressures, the company did not fully pass on the above increases which negatively impacted the margins and net profit for the year.

Two-wheelers: Barring CD-70cc, Atlas Honda Limited (AHL) on Wednesday increased price of two-wheelers by Rs1,000-5,000 effective from Mar 1.

The prices of CD-Dream, Pridor, CG-125, CG-125 Self, CG-125 Special Edition, CG-125F, CG-125 Special Edition and CB150F have now been increased to Rs80,500, Rs105,500, Rs126,500, Rs149,900, Rs151,900, Rs175,500, Rs177,500 and Rs219,500 respectively.

The price of CD-70 has been kept unchanged at Rs 75,500, a dealer told Dawn while adding that the company did not give any reason for the price hike.

The price hike comes despite an increase in overall bike sales during July-January FY20. Sales of Honda bikes during the period fell to 610,189 units from 638,903 units in the corresponding period last year.

Surprisingly, there has been no negative impact of exchange rate as rupee gained strength in the last seven months. In last week of June, one dollar was available at Rs164 as compared to Rs154-155 now.

Bike manufacturers have raised prices multiple times despite achieving over 94 per cent localisation.

Published in Dawn, February 27th, 2020