LAHORE - The dairy industry will have no choice but to pass on the price increase to consumers if new taxation measures are imposed in upcoming budget, said Babur Sultan, Pakistan Dairy Association (PDA) Chairman, after an emergency meeting convened by PDA on Friday.

The session had been called to discuss the impact of the proposal under consideration by the government that zero-rating be withdrawn on dairy products in the 2016-2017 budget.  The members concluded that there will be wide ranging, negative impacts on the dairy sector as well as the millions of consumers. The members said that they could not afford to absorb the increase in costs, and would have to increase the price of milk by Rs7 to Rs8 per litre.

Packaged milk is only 6% of the total milk consumed in Pakistan while milk and dairy products account for 22% of kitchen expenditure, which is more than wheat (12%). Babur Sultan, PDA chairman, said, “We fear that if the zero-rating regime is withdrawn, it will result in a decline of over 20% in the sale of packaged milk. Consumers will, therefore, be pushed to consume unhygienic and unprocessed loose milk.”