Unfazed by the introduction of cheaper packaged cow milk by new entrant Patanjali group, market leader Mother Dairy Monday said the company will not reduce prices to match competition.

Mother Dairy, which sells around 7 lakh litres of cow milk per day largely in Delhi-NCR market, also expressed confidence that its sales volume will not be affected with more players entering in this segment.

Haridwar-based Patanjali Ayurved has launched cow milk at Rs 40 per litre as against Rs 42 charged by the Mother Dairy.

"We welcome competition. Patanjali group's entry will lead to an increase in the overall size of the cow milk segment. It will also help farmers and the rural economy," Mother Dairy Fruit & Vegetable Pvt Ltd Director Saugata Mitra told PTI.

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Asked whether the company will cut rates, he said, "We will neither increase nor decrease our price of cow milk".

Last week, Baba Ramdev's Patanjali Ayurved announced its entry into the cow milk segment by launching cow milk and milk-based dairy products, targeting sales of around Rs 1,000 crore by FY20.

Amul and Parag Milk, too, have launched cow milk in Delhi-NCR.

"We have been serving the Delhi-NCR market for last 40 years. Our customers are loyal to the brand," he said, ruling out any adverse impact on its sales volume.

"The packaged cow milk market across the country is estimated to be of around 10-12 lakh litres per day. We sell around 7 lakh per day currently and this is estimated to touch 8 lakh litre per day by March next year," Mitra said, adding the entry of new players would expand the market size of this segment.

Overall, Mother Dairy supplies about 36-37 lakh litres of milk (pouches and token) per day, of which 32 lakh litres per day are in Delhi-NCR through 1,400 retail outlets.

Its competitor Patanjali would supply cow milk in the markets of Delhi NCR, Rajasthan, Mumbai and Pune areas of Maharashtra with a network of around 56,000 retailers, dispensing around four lakh litres milk on daily basis.

"Our milk would be cheaper than other established brands by Rs 2 at Rs 40 per litre," Ramdev had said.

Patanjali has set a target to touch daily sales of around 10 lakh litres of cow milk by FY2019-20.

"We are aiming to have a business of Rs 1,000 crore by next fiscal. This fiscal, we would have a business of Rs 500 crore," Baba Ramdev had said last week.