Amid multiple hikes in milk prices, four in 10 households have either cut down on quantity, shifted to lower priced alternatives or stopped buying milk in the last 12 months, according to a survey by LocalCircles. milk price hike, govardhan, dairy companies, milk consumption
Most well-known dairy brands, whether cooperatives or startups, have raised the price of their products at least two to five times in one year by Rs 1-3 each time. The latest increase of Rs 3 in the prices of all grades of milk by Amul, Govardhan and other brands has again led to some households optimising or reducing their milk consumption.
The cumulative increase in prices by some brands has been more than Rs 12 per litre over the last one year. The major reason cited by dairy players is the steep rise in costs of energy both for operation and logistics, packaging and cattle feed and other overheads including labour cost.
According to the survey, 59% or six in 10 households surveyed indicated they are paying higher prices and buying the same quantity of milk from their preferred brand. Among the remaining, the largest segment of 19% indicated that they have reduced the quantity that they purchase. About 16% have switched to a cheaper alternative or grade of the same brand, 3% have switched to a lower cost brand or local supply source, and 3% have stopped buying milk.
A comparative study of data collected through surveys in August 2022 and February 2023 shows that against 6% who had switched to a lower cost brand or local supply source in August, this time only 3% have made the switch. However, the percentage of those who have opted for a cheaper alternative of the same brand has jumped from 4% in August 2022 to 16% in February 2023, while the percentage shift in the category of those buying the same quantity while maintaining brand loyalty has changed from 68% to 59%, indicating that price factor remains a sensitive issue for consumers when it pinches.
According to the survey, household consumers remain price sensitive, particularly as there has been more than several rounds of increase in prices of most milk brands in the country.
“With 19% reducing the quantity of milk they purchase in the last 12 months and 3% households just putting a full stop to their milk consumption, the need of the hour is for government to intervene to ensure prices for consumers don’t rise any further in 2023,” LocalCircles said in a statement.