Karachi’s milk price is now higher than Paris, Melbourne and Amsterdam after tax hike

KARACHI: Milk prices in Pakistan have increased by more than 20 percent following the implementation of a new tax, making dairy products more expensive in Karachi than in Paris, Melbourne and Amsterdam.

According to Bloomberg data, ultra-high temperature (UHT) milk now costs 370 rupees ($1.33) per litre in supermarkets in Karachi, compared to $1.23 in Paris, $1.08 in Melbourne, and $1.29 in Amsterdam.

The 18% tax, which is part of the recent tax changes approved in the national budget, has significantly increased the price of milk, which was previously exempt from tax.

Muhammad Nasir, spokesman for the local unit of Dutch dairy producer Royal Friesland Campina NV, said that before the tax, milk prices in Pakistan were comparable to developing countries such as Vietnam and Nigeria.

Retail prices have increased by up to 25 percent due to the new tax.

The increase in milk prices is expected to increase inflation in Pakistan, where wages are stagnating and purchasing power is declining.

Last week’s budget, which recorded a 40 percent tax hike, is aimed at meeting conditions set by the International Monetary Fund for a new bailout.