KARACHI, Aug 3: At a time when Ramazan is only a month away, producers of tetra milk have announced an increase in the prices of their products and, on the other hand, dairy farmers are also flexing their muscles to increase the prices of their produce.

Tetra milk producers have announced an increase of Rs2 on a litre pack from August 1, 2008 besides raising Re1 each on half and quarter packs.

The litre pack will now be available to the consumers at Rs50 as compared with Rs48 as on May 1, while the half and quarter litre packs will be available at Rs28 and Rs15 as compared with Rs27 and Rs14, respectively.

According to a retailer, the manufacturers of tetra milk have only informed the retailers about the increase in the prices without mentioning the reasons behind this increase.

He said it seemed that following the persistent increase in transportation cost caused by rising diesel and petrol prices coupled with one per cent increase in the general sales tax to 16 from 15 per cent in the new budget, the manufacturers wanted to pass on the impact to the consumers.

In June 2005, the litre pack was available at Rs29. In March 2006, the price was increased to Rs36 followed by another hike, pushing it to Rs37 in September 2006.

Due to the growing demand of milk in tetra packs, manufacturers have reportedly indulged in the practice of increasing prices of their products several times in a single year.

In September 2007, producers of Milkpak increased the rates of its one-litre pack from Rs42 to Rs44 while other manufacturers followed suit in October 2007. The rates of Rs44 for a litre pack remained intact till February 2008.

Observers may recall that in February 2007, the city government had asked the multinational milk producers to furnish details of the cost incurred on their milk packs in order to determine the cost so as to prepare a policy to regulate its prices.

The city government also had pressed the producers for the printing of retail prices on the packs coupled with production and expiry dates. However, the retail price is still not mentioned on the packs though the date of manufacture and expiry is printed.

Efforts were also made to get the cost of the production and profit margin of producers. Even the district coordination officer had issued a timeframe of 15 days to the producers to furnish details. Some producers gave the details while others ignored the orders.

The city government had made another effort in April 2008 to control the prices of tetra milk. The Enterprise and Investment Promotion (E&IP) department of the city government had asked the tetra milk producers to mention the law under which they fixed and regulated prices.

Besides, the city government also wanted to have a meeting with them. Instead of a meeting, the tetra milk producers served a legal notice on the E&IP department, saying that the commodity did not come in the purview of essential commodities and the E&IP had no right to check its prices

On the other hand, the city government has been struggling hard to fix and regulate the prices of fresh milk. Despite fixing the wholesale and retail prices at Rs32 and Rs34 per litre, the retailers are openly charging Rs40 per litre, while in some areas it is sold at Rs42 a litre.

Two days back, the dairy farmers had pushed up the wholesale rates by Rs4 per litre. According to the in-charge price checking CDGK, Matanat Ali Khan, taking action against this hike in milk prices some 11 wholesalers at Lea Market had been sent to jail in the last two days. He claimed that the wholesale rates of fresh milk had been reverted to Rs32 per litre.

Mr Khan said that on August 1, fines amounting to Rs71,000 were imposed on 51 defiant retailers and on August 2, fines of Rs42,000 were imposed on around 31 retailers.

He, however, said that his team could not force the manufacturers of packed milk to control the prices. This could only be done by officially fixing the prices of packed milk, he added.