Price Hike Explained
A nationwide increase of Rs 2 per litre has been implemented for popular milk varieties by both Amul and Mother Dairy, commencing on May 14. This decision
stems from a significant rise in the costs associated with procuring milk and the overall production process. The Gujarat Cooperative Milk Marketing Federation (GCMMF), responsible for Amul products, confirmed that these new rates would be applied across India. Mother Dairy followed suit shortly after, announcing similar adjustments to its liquid milk offerings. This price adjustment represents approximately a 2.5% to 3.5% increase in the maximum retail prices, which is still reported to be below the general food inflation rate. The primary drivers for this revision include the escalating expenses for cattle feed, packaging materials like film, and fuel, all of which have seen substantial hikes over the past year. Furthermore, dairy farmer payments have also seen an increase, with member unions raising payments by Rs 30 per kilogram of fat, a rise of about 3.7% compared to the preceding year. The cooperative emphasizes that a substantial portion, around 80%, of the revenue generated from consumers is directly channeled back to the milk producers, underscoring their commitment to supporting the farming community and ensuring the sustainability of milk production.
Impact on Consumers
The recent price revision means consumers will now find familiar products costing more. For instance, in Gujarat, including regions like Ahmedabad, Saurashtra, and Kutch, a 500 ml pouch of Amul Taaza will now be priced at Rs 29, a jump from the previous Rs 28, and a one-litre pack will retail at Rs 57, up from Rs 55. Similarly, Amul Cow Milk (500 ml) has seen its price rise from Rs 29 to Rs 30, and Amul Shakti will now be available for Rs 32, an increase from Rs 31. The costs of other products have also been affected. A one-litre pack of Amul Tea Special is now Rs 66, an increase from Rs 63. Amul Gold, a 500 ml pack, will cost Rs 35, up from Rs 34. Buffalo milk (500 ml) has also seen a price adjustment, moving from Rs 37 to Rs 39. Mother Dairy's adjustments also affect various product lines. Bulk vended or token milk has gone up from Rs 56 to Rs 58 per litre. Full cream milk is now priced at Rs 72, a rise from Rs 70. Toned milk will cost Rs 60 per litre, an increase from Rs 58, while double-toned milk has been revised from Rs 52 to Rs 54 per litre. Cow milk prices have moved from Rs 60 to Rs 62 per litre, and Pro Milk is now retailed at Rs 72, an increase from Rs 70. These changes reflect the growing operational expenditures within the dairy sector.
Industry Rationale
Both Amul and Mother Dairy have articulated clear reasons for these price adjustments, emphasizing the need to balance farmer welfare with consumer interests. Mother Dairy specifically cited a consistent increase in farmer procurement prices, noting a rise of approximately 6% over the last year. Despite continuous efforts to mitigate the impact on consumers, this sustained escalation in costs has necessitated the revision. The company views this price adjustment as a partial absorption of the increased expenses, designed to maintain equilibrium between supporting dairy farmers and keeping prices accessible to the public. They also highlighted that a significant majority, between 75% and 80%, of their milk sales revenue is directly allocated to payments to farmers, a crucial aspect of supporting rural livelihoods and ensuring a consistent supply of milk. Amul, operating under a cooperative structure, similarly stated that 80% of customer payments are returned to milk producers, indicating a strong commitment to the farming community. This latest revision aims to ensure the continued viability of milk production and bolster farmer incomes. It's worth noting that Amul's last price increase occurred on May 1 of the current year, after a period of stable pricing since June 2024, while Mother Dairy's previous revision took place in April 2025.
