Amul is also expanding capacity to meet rising demand. Mehta said the company has already tripled capacity in some segments and plans to increase it seven to eight times by the end of the financial year.
Amul said it will transfer the entire benefit of the recent goods and services tax (GST) rate cuts to both farmers and buyers. Jayen Mehta, Managing Director of Amul, said the cooperative model ensures that “we will definitely increase our share of the consumers’ revenue to the producer in a much larger way, so it benefits both producers and consumers.”
Mehta explained that half of Amul’s turnover now falls under the zero percent GST category, while the remaining is taxed at 5%. “Half the products that we do, or half of our turnover, come with 0% GST, and the balance half with just 5% GST,” he said.
According to Mehta, the change will improve farmer realizations while boosting demand. “We have been growing at double digits all through last year and the first five months of this year. We will obviously look at higher double-digit growth now, because this will mean a lower price for the consumers and a sustained demand for the producers.”
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Mehta added that the rate cuts will spur consumption of a wide range of dairy products, including ghee, cheese, butter and ice cream. He noted that per capita consumption remains very low in India, creating a large growth opportunity. “Only one in 10 Indian consumers eats butter. Only one in 20 eats cheese. So you can imagine that with lower prices and sustained lower prices, we will see this category expanding multiple times.”
On the producer side, Mehta pointed out that cooperatives already pay high farm-gate prices, with buffalo milk averaging ₹60–64 per litre and cow milk at ₹40–45 per litre. Farmers currently receive 80–90% of what consumers pay and this proportion will rise further after GST cuts, he said.
He further said the GST reduction will make the organised sector more competitive and reduce tax evasion in categories like ghee. “With 5% duty, adulteration will come down, tax evasion will come down. The organised sector will grow, and you will see multiple growth happening in that.”
Amul is also expanding capacity to meet rising demand. Mehta said the company has already tripled capacity in some segments and plans to increase it seven to eight times by the end of the financial year. “Good demand is always good for the brands, and when you see stock out, it means it is sold out most of the time. Nobody wants a stock out situation for disappointed customers,” he said.
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