Bengaluru: Hoteliers in Bengaluru have warned that food prices could rise if the Karnataka government approves a proposed increase of Rs 10 per litre in the price of Nandini milk.
Hotel owners said they could absorb a marginal increase of around Rs 2 or Rs 3 per litre, but a Rs 10 hike would significantly increase their operating costs and could force them to pass on the additional burden to customers.
Hoteliers seek phased increase
P C Rao of the Bruhat Bengaluru Hotels Association (BBHA) said most hotels depend on Nandini milk and would find it difficult to absorb a sudden Rs 10 increase.
“A sudden Rs 10 per litre increase is too much for us to accommodate without increasing the prices of our food items,” Rao said.
Subrahmanya R, who runs a hotel in North Bengaluru, said the hotel industry was already dealing with financial pressures following recent increases in operating costs.
He said several hoteliers had suffered losses during the West Asia conflict and some establishments had faced disruptions in the supply of cooking gas cylinders.
The hoteliers have suggested that any increase in milk prices be implemented in phases. Rao said an increase of Rs 2 or Rs 3 every six months or once a year would be easier for the industry to manage.
Milk-based products may also become costlier
Hoteliers said a rise in milk prices could have a wider impact because milk is used in several products served by hotels and other food establishments.
Prices of curd, ghee, butter and paneer could be affected by an increase in the cost of milk. The impact could also extend to sweets, bakery products and other food items that use milk or milk-based ingredients.
The hoteliers have therefore urged the government to consider the potential impact on the hospitality and food sectors before taking a decision.
Government yet to take final decision
Chief Minister D K Shivakumar met representatives of various milk unions on Saturday and said the government would take a decision on the proposed Nandini milk price increase after consulting the Cabinet.
Shivakumar said milk unions were currently facing losses and that dairy farmers had also sought an increase in the price.
He said the government was committed to supporting dairy farmers and milk unions and would examine the issue before taking a decision.
The milk unions have reportedly sought an increase of Rs 12 per litre, with Rs 2 of the proposed increase to be passed on to the unions. Shivakumar said the government had sought details of milk prices in Tamil Nadu, Andhra Pradesh and Telangana before deciding on the issue.
The Chief Minister’s remarks indicate that the proposal remains under consideration, with the final decision expected after consultations and an analysis of milk prices in other States.
Concerns over competition
Rao also said the government should consider the possible impact of a substantial price increase on consumer choices.
He noted that if Nandini milk becomes significantly more expensive, some consumers could consider switching to private brands. He urged the government to examine the pricing issue comprehensively before finalising any increase.
For Bengaluru’s hotel industry, the outcome of the government’s decision could therefore have implications not only for the cost of milk but also for the pricing of several milk-based food products.