India’s $8 billion Amul dairy group is getting ready for interruptions and higher input costs for some products starting in July when the government’s ban on plastic straws kicks in.
India last week refused to relinquish an impending ban on straws that are packaged with small juice and milk beverage packs, fuelling fears in the $790 million industry that includes players like PepsiCo, Coca-Cola, India’s Dabur and Parle Agro.
According to R. S. Sodhi, MD, Amul, the company has not worked out any practical solution to replace the tiny plastic straws and the paper variant is not feasible. He added that the intention of the government is good, but the straws are not even 0.1% of total plastic consumption.
The entire industry is affected, and there is a growing tension in India’s drinks industry at a time when demand surges in the scorching summer season.
Prime Minister Narendra Modi is pushing to stamp out polluting, single-use plastic trash that chokes rivers. The government believes the tiny straws are a “low-utility product” and should be scrapped in favour of paper straws or spout pouches.
Sodhi said. Amul, a household name in India best-known for its milk and butter products, clocked sales of 610 billion rupees ($8.04 billion) in 2021-22, Sodhi said.
It also sells various milk-based beverages in small packs with straws. With the ban, supplies of such packs will be disrupted and manufacturers may shift to more expensive packaging solutions, thereby raising costs, Sodhi said, adding that Amul sells billions of such carton packs each year.
Pepsi’s Tropicana juice, Coca-Cola’s Maaza and Parle Agro’s Frooti mango drinks are among other popular beverages sold in such packs. An industry body representing them and other beverage makers has said it plans to again raise concerns with the government, and Sodhi said Amul will follow suit.