Pakistan is the fourth largest producer of milk in the world. Milk is consumed in both fresh and tetra pack form in the country. This study explores the socioeconomic factors that affect the consumer’s preferences towards tetra pack and fresh milk consumption. Primary data were collected from a number of 130 randomly selected consumers using a well-structure questionnaire from Faisalabad district of Punjab, Pakistan. For analytical purpose, binary probit regression model was used, where multiple factors were identified that influence the consumer decision of buying milk. Results revealed that income, education, milk price, age and gender of consumer, reason of milk preference and advertisement were significant determinants that affected the consumers’ preferences towards milk. Income and price of milk were considered dominant factors that affected the consumer’s preferences of milk type. The probit regression estimates indicated that the price was negatively related to tetra pack milk, where one PKR increase in price of milk decreased the probability of tetra pack milk consumption by 21.3 percent. The fresh milk is inferior goods in regarding to income level. For one PKR increase in income the likelihood of consumer buying decision towards tetra pack milk increased by 14 percent. The effect of education level of the household on the probability of buying milk has been found to be significant. Another important factor was ‘health and hygienic consideration’, the consumers who believe that the tetra pack milk is hygiene and healthy are 8.7 percent more likely to prefer tetra pack milk instead of fresh milk. The study suggests government to reduce price difference of fresh milk and tetra pack milk in order to enhance the assurance of quality milk to consumers. Milk processing and marketing stakeholders need to meet quality standards and provide milk at fair price to customers.