The country’s largest dairy brand, the ₹72,000 crore Amul has been in the eye of a storm due to its alleged high-handedness. It began with its entry into Karnataka in April and now States such as Kerala are also complaining. Though the law doesn’t prevent Amul from selling in other States (it has been procuring milk from 15 states outside of Gujarat), there is an unwritten understanding not to disturb the local cooperative’s dominance.

“Nandini continues to be the market leader and we have a small base. In April we announced an ecommerce launch in Bangalore. Our milk price is much higher than Nandini as we don’t get a subsidy. We can never match Nandini’s pricing in Karnataka,” says Jayen Mehta, MD, Amul. Nandini operates under Karnataka Co-operative Milk Producer’s Federation Ltd (KMF).

Amul, says Mehta has been packing its ice-creams at Nandini’s plants for the last 25 years. “We are using Nandini milk to produce Amul ice-cream. During COVID when everybody had surplus milk and there was no market for milk we purchased as much as 5,000 tonnes of cheese, which is equal to 2 lakh litres of milk per day. We are both cooperatives, part of the same model, so the question of competing doesn’t arise.”

 However, a section of the dairy industry does consider Amul a bully, which is trying to grow at the expense of both local cooperatives as well as the private dairies. “Wherever we are selling, we are procuring but our growth is not at the expense of the local cooperatives. In Rajasthan, we procure milk, we sell milk, but we don’t undercut Saras in price, we coordinate with them, we work in synergy. In every State the local cooperative brand is always No.1. We don’t want to take their volumes,” emphasizes Mehta.

Source : Fortune June 6th 2023