Covid-19; Ice-cream industries in India running at a loss of Rs 6000 crore

Since March of this year the ice-cream industries of India experienced a loss of Rs 6000 crore that constitutes 60% of its annual turnover which is about Rs 10,000 crore.

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Summers are the peak season for all ice-cream industries but this year proves to be a curse on them. The rumour which went viral that cold foods constitute coronavirus risk is the main reason for the downfall. This, however, depends on the severity of the virus and the place. Although WHO has officially declared that the above statement has no scientific evidence, the majority of the customers still tend to believe it and hence stay away from cold consumptions.

Apart from this, the industries also suffered from logistical challenges such as local transport, labour, etc. that occurred due to the lockdown. As summer is the prime time for the sales, the industries start the production two to three months prior, that now, due to the lockdown had resulted in huge stock with minimal sales. Experts suggested that since March, of this year the ice-cream industries of India experienced a loss of Rs 6000 crore that constitutes 60% of its annual turnover which is about Rs 10,000 crore. According to the members of the Indian Ice-cream Manufacturers Association (IICMA), this is the first time that the industries witnessed a loss at such a large scale. The loss in the last 4 months that is estimated is about 85%-90% and annual loss being around 20%-30%. When production and sales rate fell, it resulted in the financial crisis of the industries as they are bound to various payments such as wages, electricity bills, interest payments, and other fixed expenses.


This decrease in the sale of ice-creams, however, had caused a price drop of skimmed milk or dairy whitener. Before the lockdown, the availability of skimmed milk was running short, and due to that, the price went high. But as the lockdown started, the demand for liquid milk from bulk buyers such as hotels and restaurants fell and as a result, the dairy industries shifted a large part of the liquid milk to the production of dairy whiteners, which stays fresh for a longer period than liquid milk. As skimmed milk is one of the essentials in making ice-creams, thus, the fall in the sales of ice-creams also caused a fall in the prices of dairy whiteners.

Amidst the effect of coronavirus and lockdown, another disaster that affected the ice-cream industries a month ago was the cyclone Amphan. A long-duration power cut melted all the refrigerated and stocked ice-creams. The manufacturers and sellers left with no option other than dumping it, as once melted, the ice-creams won’t retain the same texture and flavor. It was estimated that around Rs 15 crore ice-creams had been destroyed. Even after spending nearly a lakh of rupees every day in diesel to run generators just to maintain the stocks safe, the losses were huge.

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Covid-19; Ice-cream industries in India running at a loss of Rs 6000 crore
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Since March of this year the ice-cream industries of India experienced a loss of Rs 6000 crore that constitutes 60% of its annual turnover which is about Rs 10,000 crore.
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THE POLICY TIMES
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