Amul passes on GST benefits, making butter, cheese, and ice cream cheaper for consumers.
In a significant move poised to boost consumer spending, the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets products under the Amul brand, has announced price cuts on over 700 of its product packs. The revision, effective September 22, follows a recent reduction in India’s Goods and Services Tax (GST) rates. The decision by Amul to fully pass on these tax benefits to customers is a clear signal of its strategy to stimulate demand and drive market growth, particularly in product categories where per capita consumption is currently low.
The price reductions are wide-ranging, covering a diverse portfolio of daily staples and specialty items. Consumers can expect to see lower prices on essential dairy products, including butter and ghee. For instance, the price of a 1-litre carton of Amul Ghee has been slashed by Rs 40, while a 100g pack of Amul Butter is now Rs 4 cheaper. These cuts on core products are designed to make high-quality dairy more accessible and affordable for a broad consumer base.
Beyond the staples, the price adjustments also apply to processed and frozen goods, with some of the steepest cuts seen in the ice cream segment. The price of a 1-litre tub of Vanilla Magic ice cream has dropped by a substantial Rs 60, and popular small-format items like Kulfi and ice cream cups are also significantly cheaper. These deep cuts on premium and impulse-buy products are a deliberate strategy to attract new consumers and drive growth in high-margin categories, a move that will be closely watched by the global dairy economics community.
The price drops extend to other segments of Amul’s expansive product line, including chocolates, bakery items, and frozen snacks. Products such as Amul Dark Chocolate and French Fries have seen notable reductions, demonstrating a holistic approach to the company’s pricing strategy. This all-encompassing revision, which also includes specialty items like Mithai Mate, aims to leverage the tax benefits to increase sales volume and market share across the board, providing a competitive edge in India’s fast-growing consumer market.
GCMMF’s action is part of a broader industry trend, as Mother Dairy also announced similar price cuts. The cooperative, which is owned by 3.6 million farmers, believes that these price reductions will catalyze a significant increase in demand. By lowering prices, Amul hopes to tap into a huge growth opportunity in a country where the per capita consumption of products like ice cream and cheese remains low. This strategic move could serve as a model for other large agribusinesses looking to expand their market footprint.
Original reporting by Moneycontrol.com: https://www.moneycontrol.com/news/business/companies/from-butter-to-ice-cream-amul-cuts-prices-on-700-products-after-gst-rate-reduction-13563230.html
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