May 1: There are currently more than 50 ice cream industries in Nepal. The ice cream they produce is not inferior to foreign brands in any way. However, since the price of foreign products is cheap, the local Nepali products are struggling to find a market.
Dozens of flavors of ice cream including vanilla, chocolate, butter scotch, and strawberry are available in the market. In Nepal, there is competition between domestic brands such as Nepal Dairy, DDC, Ajabko, Snowfun, Every Day as well as imported foreign brands of ice cream such as Baskin-Robbins, Vadilal, Amul and Cream Bell.
Traders say that consumers prefer foreign brand ice creams to domestic brands. As a result, retail traders say that Nepali ice cream brands are losing customers as the consumers are looking for imported ice cream.
“The goods we sell are manufactured here. But the consumers go to supermarkets looking for foreign goods. Therefore, even though the demand for ice cream increases during the summer season, Nepali ice cream is not sold much," said a retailer.
The data of the Department of Customs shows that the import of ice cream has increased in the last five years. In the Fiscal Year (FY) 074/75, Nepal imported 412,866 kg of ice cream worth Rs 179.6 million.
In FY 075/76, altogether 598,913 kilograms of ice cream worth Rs 188.8 million was imported into Nepal. However, its import decreased in 076/77. Due to the Covid-19 pandemic, the ice cream import decreased to 294,020 kg worth Rs 130.2 million in that year.
Similarly, the import of ice cream increased again in 077/78. In that year, 341,744 kg of ice cream worth Rs 145.4 million was imported. In the year 078/79, a total of 603,025 kg of ice cream worth Rs 268.5 million was imported into Nepal.
Rajendra Adhikari, spokesperson for Nepal Dairy Development Corporation, says that they are not able to produce ice cream as per the demand due to lack of raw materials for making ice cream. He says that the lack of raw materials has created a situation where ready-made ice cream from outside has to be promoted in the country.
“When there is not enough curd and milk, there is no situation to make ice cream. That is why the import has increased," he said. He claimed that the lack of milk in the domestic market has also cause problems in ice cream production.
Arjun Adhikari, a member of the ice cream department of Nepal Dairy Association and owner of Amul Dairy and Beverage Pvt Ltd, complained that Nepali companies are not getting market due to foreign brands despite the increase in demand for ice cream in summer.
He says that even though the demand in the market has increased, it is difficult for Nepali brands to compete because of foreign brands.
“The quality of our ice cream is not less than that of foreign countries. However, it is difficult to win the trust of customers because of foreign ice cream. In addition to that, it is difficult for us to compete on price due to the high customs duty on raw materials,” said an office bearer of the association.
According to the official, the ice cream trade only lasts from January to August. For the remaining four months, the industry will have to be shut down during the winter season.
'Government needs to bring industry friendly policy'
While the customs duty on readymade ice cream imported from other countries is 10 percent, the customs duty on raw materials is 40 percent.
“In such a situation, how can domestic companies compete on price?” questioned Prahlad Dahal, president of Nepal Dairy Association.
“In order to save indigenous producers and make the country self-sufficient in ice cream, the government needs to bring an industry-friendly policy,” he added.
According to President Dahal, there are more than 50 small and large ice cream industries in Nepal. These industries produce more than 20,000 liters of ice cream on an average day. However, he says that it is difficult for these industries to find the market due to lack of industry-friendly policy of the government.
