February 14th, 2025: FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the year ended December 31, 2024.
Despite experiencing 17% year-on-year sales growth in the first half of the year, driven by strong brand initiatives, increased consumer awareness, and customer-centric offerings, the imposition of an 18% sales tax on packaged UHT milk in July 2024 had a severely adverse impact, leading to a substantial decline in packaged milk volumes in the second half of the year.
This taxation directly undermines government priorities to improve access to safe nutrition and support farmer livelihoods. The price gap between packaged and loose milk incentivizes the consumption of potentially unsafe loose milk, threatening public health.
It also restricts dairy companies’ ability to continue to invest in essential dairy development programs that support farmer capacity-building and provide financial assistance, jeopardizing farmer livelihoods.
The tax implementation further fuels the growth of the undocumented dairy sector, negatively impacting established dairy companies’ ability to maintain efficient cost structures and hindering competitiveness in export markets. The nascent dairy export segment, which had recently gained significant traction, now faces serious challenges and will negatively impact the future of Pakistan’s dairy industry.
