Brookside ups battle for raw milk with price hike

Brookside Director of Milk Procurement John Gethi

Dairy farmers are set for a major boost after processor Brookside announced yesterday it would beginning today increase producer prices of milk by 25 per cent.

The new rate will see farmers earn Sh5 more per litre, coming on the back of prolonged dry weather that hit the country in the first quarter of the year.

Last month, farmers supplying milk to Brookside benefited from another increment of Sh2 for every litre delivered.

According to the latest price adjustment, the Ruiru-based processor will pay up to Sh42 per litre for all fixed price contracts beginning this morning, the highest in the industry in over six years.

Brookside Director of Milk Procurement John Gethi said the new rate was a bonus to farmers to cushion them from the effects of prolonged dry weather, which substantially shrunk production.

Mr Gethi also attributed the new incentive to increased demand for the company’s products, which he said had pushed up shelf prices.

“The current business environment has pushed up the shelf prices of our products. We have decided to pass on the benefits of these increases to our farmers during this exceptionally dry period,” he said in a statement.

Brookside’s move signals a tough fight for the control of Kenya’s raw milk market, estimated to be over five billion litres per annum.

The new rate makes Brookside the highest paying processor in Kenya and is expected to intensify the fight for control of the raw milk market, with major processors like Daima, New KCC and Githunguri likely to react as they seek to guard their own turf.

All-time high

Brookside, which controls nearly half of Kenya’s raw milk market, has an installed processing capacity of over 1.5 million litres of milk per day and partners with over 300 dairy co-operatives drawn from more than 27 milk producing counties.

“Our continual review of producer prices is based on our desire to continue providing an assured market for raw milk for our hard working farmers. This goes hand in hand with our promise of regular payments for every kilo of milk delivered to us,” said Mr Gethi.

Retail prices of milk have hit an all-time high over the past fortnight, with a 500ml packet of fresh milk selling at Sh55 in some outlets.

A similar quantity of long-life milk is retailing at Sh75 in major supermarkets.