Dairy Association Admits Negative Perception of Packed Milk Quality

By Salman Khan
Islamabad: Pakistan Dairy Association has accepted “ poor quality perception” of packed milk in the local market.

In local market, the consumers prefer to buy ‘loose milk’ due to perception that companies involved in making ‘packed milk’ do not produce quality of milk.

When asked, chairman Pakistan Dairy Association accepted that public had common perception of poor quality of packed milk.

But they claimed that they were producing higher quality of milk and even producing milk in line with international standards and therefore they were exporting U.S.

They also offered the government to reduce the milk prices by PKR 50/= for consumers if sales tax is revised from 18% to 5% in the budget.

The government’s refusal to cut sales tax on packed dairy milk in the budget has irked Pakistan Dairy Association which has warned the government to face dip in revenue collection and possible fall in exports.

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The tax collection was Rs 13 billion in 2023 which went up to Rs 44 billion in 2024.

This is first time hike in tax collection which would come down due to higher taxes,” Chairman Pakistan Dairy Association Usman Zaheer said along with representatives of different dairy companies said during a press conference.

He said that exports of dairy milk had started to United States and Middle East and they were exploring new market of Central Asian countries.
The exports stood at $15 million in 2023 which jumped up to $ 35 million in 2024.

“We will not be able to achieve a target of $70 million due to higher taxes,” they said adding that government had agreed to cut taxes in budget but their proposals were not implemented.

They have asked the government to Reduce GST on dairy (Liquid & Powder) from existing 18% to 5%.

They said that since imposition of tax in July 2024, volumes have declined by 20% and continued to decline further.

They said that reducing sales tax on milk to 5% from July 2025 can help volumes grow by roughly 20%. Government revenue will increase by +22% YoY, neutral revenue in Year 3 and growth from thereon.

It will renew investments in farms, processors, and exports. They further said that reduction in taxes will reduce undocumented economy by limiting consumption of loose milk,” they said adding the reduction in taxes will also cause cut in the milk prices by Rs 50.