Decision to procure milk from the state is seen as a threat to local brand aavin: Amul is once again stirring up a storm, this time in Tamil Nadu
Amul, the country’s leading dairy brand, is at the center of controversy for the second time in a month, following its decision to source milk from Tamil Nadu (TN). Last month, Amul, which is marketed by the Gujarat Co-operative Milk Marketing Federation (GCMMF), sparked a storm after entering the Bengaluru market, dominated by local Karnataka Milk Federation brand Nandini.
While in TN, Amul has been selling its products for some time through local outlets, the decision to source milk from the state, using its multi-state cooperative license, is a first.
Fearing that Amul’s entry into TN could hurt the local Aavin brand, the state’s chief minister, MP Stalin, on Thursday asked Union Home Secretary Amit Shah, who holds also the portfolio of the co-operative, to ask the large dairy to cease the supply of milk in the State.
“We have learned that the Kaira District Milk Producers Cooperative Union (Amul) has used its multi-state cooperative license to set up chilling centers and a processing plant in Krishnagiri district. He planned to procure milk through Farmer Producer Organizations (FPOs) and self-help groups in and around Krishnagiri, Dharmapuri, Vellore, Ranipet, Tirupathur, Kancheepuram and Tiruvallur districts in our state” , Stalin said in a letter to the Shah.
This, he said, could hurt Aavin because it would lead to unhealthy competition between co-ops. “Regional cooperatives have been the foundation of dairy development in the states. They are better equipped to interact with and support producers, as well as to protect consumers from arbitrary price increases,” he said, adding that cross-buying was against the spirit of the cooperative movement.
When contacted, Jayen Mehta, MD, GCMMF, said there was no threat to local brands with their milk supply in TN. “I don’t know what it is. But the idea is to coexist, not to compete with cooperatives,” he said.
Speaking to FE, Ashwin Chaudhary, Senior Manager, Milk Supply, Project and Vigilance, Dudhsagar Dairy which is one of GCMMF’s 21 district dairy cooperatives, said there were no competition concerns. unhealthy.
“How can the growing number of players in an industry create unhealthy competition? Rather, it will give farmers the opportunity to choose the cooperative that offers them a better price. And as I understand it, that’s called healthy competition,” he said.
Mehta had reiterated a similar point last month when chatting with FE regarding his move to Bengaluru, saying Amul had no intention of competing with Nandini.
“At this time, we are only looking at e-commerce/quick-commerce channels. We don’t look at general trade. For that, we will have to lower the prices. There is currently no such plan. And a modern commercial entry of Amul in Bengaluru will take place only six months later,” Mehta had said of Amul’s approach to the Bengaluru market.
Harish Bijoor, brand expert and CEO of Bengaluru-based Harish Bijoor Consults, said Amul may face a challenge from Aavin, just as he did from Nandini and his consumer base in Karnataka. last month.
“I don’t think regional brands like Aavin or Nandini will make it easy for Amul to take over their market. Most dairy co-operatives share geographic competences. Milk is a fresh product, preferably supplied locally. While criss-crossing markets is a good thing, it may not be the best strategy from a fresh milk perspective,” he said.
Aavin is the state’s apex co-operative marketing federation and there are approximately 9,673 milk producer co-operative societies under its umbrella in rural areas. They source 35 lakh liters of milk a day from around 4.5 lakh paying members, according to the state government. Under this arrangement, milk producers are assured of remunerative and uniform prices throughout the year by the cooperative societies, he said.