Amul dairy says it is preparing for sales disruptions due to the straw ban

India’s $8 billion dairy giant Amul said Monday it is bracing for disruption and higher input costs for some products from July when the government’s ban on plastic straws goes into effect.

India last week refused to give up on an upcoming ban on straws packaged with small juice and milk drink packs, stoking fears in the $790 million industry, which includes the likes of PepsiCo, Coca-Cola, India’s Dabur and Parle Agro, Reuters reported.

Amul has not worked out a practical solution to replace the tiny plastic straws and the paper variant is not feasible, said RS Sodhi, Amul’s managing director.

“The government’s intention is good… (but) straws do not even account for 0.1% of total plastic use,” Mr Sodhi told Reuters.

“The entire industry will be affected.”

Mr Sodhi’s comments underscore rising tensions in the Indian beverage industry at a time when demand is spiking in the hot summer season.

Prime Minister Narendra Modi is urging to eliminate polluting single-use plastic waste clogging rivers. The government believes the tiny straws are a “product of little use” and should be scrapped for paper straws or spout bags.

Amul, a household name in India best known for its dairy and butter products, had sales of 610 billion rupees ($8.04 billion) in 2021-22, Mr Sodhi said. It also sells various milk-based drinks in small packs with straws.

With the ban, supplies of such packs will be disrupted and manufacturers could switch to more expensive packaging solutions, increasing costs, Mr Sodhi said, adding that Amul sells billions of such carton packs every year.

Coca-Cola’s Pepsi Tropicana juice and Coca-Cola’s Maaza and Parle Agro’s Frooti mango drinks are among other popular beverages sold in such packs. An industry association representing them and other beverage makers has said it will once again raise concerns with the government and Mr Sodhi said Amul would follow suit.

“We will write to the responsible authorities,” he said.