On Thursday, Kerala Cooperative Milk Marketing Federation (KCMMF), also known by the brand name Milma, expressed grave concern regarding the propensity of some State milk marketing federations of entering markets outside of their respective state. The KCMMF claimed that the action violated the cooperative ethos on which the country’s dairy industry has been set up for the betterment of millions of milk farmers.
“Of late, there has been a growing tendency on the part of some of the State milk marketing federations to market their staple products outside their respective domain. This grossly violates the federal principles and cooperative spirit based on which the country’s dairy cooperative movement has been built and nurtured by pioneers like Tribhuvandas Patel and Verghese Kurien,” Milma Chairman K.S. Mani was quoted as saying to the Hindu.
Mani stated that Amul’s (Gujarat Milk Cooperative Federation) initiative to advertise its staple goods in Karnataka has encountered stiff opposition from state competitors but the Karnataka Milk Marketing Federation has lately opened its stores to sell its Nandini brand of milk and other goods in several areas of Kerala. “This is a highly unethical practice which defeats the very purpose of India’s dairy movement and will harm the interests of the farmers,” he said.
He cautioned that, unless the Union and State governments worked together to develop a consensus, the tendency would result in unhealthy rivalry among the States.
Mani meanwhile also stated that the cross-border marketing of liquid milk shall be avoided as per the agreements and business relations existing among milk cooperatives. If not, it would amount to blatant encroachment of the market area of the respective state, he said. As opined by Mani, the spirit of cooperative values, which have been fostered for a long time by mutual consent and goodwill, will be jeopardised by such behaviours from any side.
Mani advised avoiding the propensity to create sales locations or recruit franchisees in order to reach areas outside of one’s area of expertise. “Initially, they sell only value-added products, then start selling liquid milk also and subsequently begin shop-to-shop distribution of milk. Eventually, they will seek to capture markets outside their area, taking advantage of the State-to-State variations in price and production cost,” he said.
Milma distributes 83% of its revenue to dairy farmers through the cooperative societies in its network, despite the fact that Kerala’s input costs for the dairy industry are significantly greater than those in other states. Additionally, as the welfare of the dairy farmers is its main priority, the majority of Milma’s surplus is handed to the farmers as additional incentives on milk prices and subsidies on cow feed.
Given these realistic facts, it is advisable for dairy cooperative federations of different States to avoid opening sales outlets or setting up franchisee agreements to sell liquid milk and other basic goods beyond their respective states, Mani remarked.
The milk saga began on April 5 after Amul’s official Twitter handle posted an infographic about its entry into Karnataka. The Congress in the state of Karnataka, ahead of the state assembly elections grabbed the opportunity to spread misleading information concerning Amul’s acquisition of the state’s local dairy brand Nandini. The matter escalated and grew into a full-fledged controversy and then Congress started milking it further for political gains.
While the Congress leader and former Karnataka Chief Minister, Siddaramaiah attempted to inflame regional tensions among Karnataka voters before the state elections using the Amul-Nandini controversy, he probably forgot that Amul had already expanded its footprints in the state when he was at the helm of affairs in 2017. As reported earlier, Amul entered Karnataka in 2017 when the Congress was in power in the state and Siddaramaiah himself was the CM.
The incumbent Chief Minister of Karnataka Basavaraj Bommai on Saturday however clarified that his government had taken all kinds of measures to make Nandini number one at the national level. Calling the house brand Nandini the pride of Karnataka Bommai said, “Nandini’s market reach is wide, there is no need to fear Amul. Congress politicising everything is not in the interest of the state.”
He also stated that Karnataka was also going to other states and marketing and that the state will do all required to put Amul behind in the competition.
