India's $8 billion Amul dairy group said it is bracing for disruptions and higher input costs for some products from July when the government's ban on plastic straws kicks in.
Last week, India refused to waive an impending ban on straws packaged with small juice and milk beverage packs, stoking fears in the $790 million industry that includes players like PepsiCo, Coca-Cola, India's Dabur and Parle Agro, Reuters reported.
The Indian government believes such tiny straws are a "low-utility product" that leads to littering and should be scrapped for paper straws or spout pouches instead, said a source familiar with the government's thinking spoke on condition of anonymity.
On the other hand, as shared by RS Sodhi, Amul has not worked out any practical solution to replace the tiny plastic straws, and the paper variant is not feasible. "The government's intention is good ... (but) the straws are not even 0.1% of total plastic consumption. The entire industry will be impacted." Sodhi told Reuters.
Sodhi's comments underscore the growing tensions in India's drinks industry when demand surges in the sweltering summer season.
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 popular beverages sold in such packs. An industry body representing them and other beverage makers has said it plans to raise concerns with the government again, and Sodhi said Amul would follow suit.
"We will write to the appropriate authorities," he said.
(Reporting by Aditya Kalra, Reuters in New Delhi; Editing by Prashant Tripathi)
