The increase in prices of various milk products, including infant formula, by manufacturers has led to a hike in the cost of these items. Effective February 20, 2023, the price of a one-liter tetra milk box has risen from INR 230 to INR 250, a significant increase from INR 220 in October 2022.
According to a Nestle Pakistan Ltd (NPL) official, the main factors contributing to this price increase are the ongoing high inflation and the devaluation of the currency, which has impacted all products. The official also cited other contributing factors such as the rising cost of milk production, feed, gasoline, and packaging materials. Although, it’s worth noting that retailers and department stores generally sell branded milk products at somewhat lower prices, depending on sales and inventory status.
A local merchant reported that NPL has raised the prices of its Nido 1 Plus 900-gram and 375-gram packets to INR 1,780 and INR 770 respectively, up from INR 1,360 and 640. Meanwhile, Nido 3 Plus 800-gram and 375-gram packets are now priced at INR 1,610 and INR 780 each, down from INR 1,490 and 720. The prices of Lactogen I 200-gram and 400-gram packets have gone up to INR 1,450 and INR 990 from INR 460 and INR 860 respectively.
Lactogen 2, 3, and Nan 1 Optipro have also seen a price increase, with Lactogen 2 and 3 priced at INR 500, INR 990, and INR 1,970 for 200-gram, 400-gram, and 800-gram packets respectively. The price of Nan 1 Optipro has risen to INR 2,050 for 400 grams and INR 4,445 for 900 grams. The Nido School Age 900-gram, 650-gram, and 390-gram packets are now priced at INR 1,470, INR 1,100, and INR 680, up from INR 1,300, INR 820, and INR 560 respectively. The price of the Milo 300-gram pack has gone up from INR 550 to INR 670. Nido 1 and Nido 3 tins (1,800 g) are now priced at INR 5,900.
Despite the price increase, NPL reported a 20% increase in sales to INR 121 billion between January and September 2022, compared to INR 100 billion in the same period the previous year. This led to a 25% growth in after-tax net profit, which rose from INR 9 billion to INR 11.4 billion. The successful sales growth, favorable product lineup, and tight control over fixed costs resulted in a 37% increase in operating profit, from INR 15.6 billion to INR 21.5 billion.