The impending rise in milk prices, scheduled for August 1, is expected to lead to an increase in the cost of dining out in hotels and purchasing bakery products. In response to the escalating prices of essential ingredients such as dal, rice, and vegetables, hoteliers and bakeries have already raised their food prices.
According to BS Bhat, the chairman of Beekays brand, there is a strong possibility of bread prices soaring in the near future. He foresees bakers being compelled to raise the prices of their bakery items due to the significant reliance on milk as a fundamental ingredient in many of their products. Additionally, milk plays a vital role in the preparation of cream, further contributing to the potential price increase.
“Already bread and bun prices have been increased considering that wheat, electricity and labour costs have gone up. Milk will further push up these prices,” Bhat explained.
Bakers argue that increasing their product prices is inevitable due to limited flexibility imposed by the regulations of the Food Safety and Standards Authority of India (FSSAI). As an illustration, they highlight the requirement that milk bread must contain a minimum of 6 percent milk.
Due to the surge in the prices of dal and vegetables, hotels have raised the costs of certain food items. Moreover, with the increasing prices of milk and dairy products, there is a strong possibility that the prices of other food items may also experience an upward trend.
PC Rao, president, Bruhat Bengaluru Hotel Association, said the hotels may increase food prices by 10 percent. “Increasing the food price will be based on the hotel standards. We can neither increase the prices too much nor run in losses by not hiking the food prices at all. Our main focus will be on not losing our customers. Our price increase will also be in such a way that the middleclass customers need not burn their pockets.”
As per insiders within the hotel industry, numerous hotels are contemplating raising the price of a cup of coffee or tea, transitioning from INR 12 to INR 15. Additionally, those establishments that currently charge INR 15 for a cup of tea may further increase it to INR 17.
