Another milk war: The Kerala cooperative flags the admission of Nandini into the state

As controversy rages in Karnataka over the entrance of Gujarat-based Amul, Kerala’s milk cooperative has expressed concern over the retail entry of the Nandini brand from the neighbouring state of Tamil Nadu.

The Karnataka Milk Federation, which recently opened a few franchise outlets in Kerala, has announced plans to enable franchise outlets throughout the state.

This has prompted the management of the Kerala Cooperative Milk Marketing Federation, which operates the popular Milma brand, to express strong reservations about Nandini’s intentions for Kerala in a letter to its counterpart at Nandini.

The Kerala cooperative comprises 15 million dairy farmer members and a few thousand cooperatives. Milma chairman K S Mani stated that some state milk marketing federations (Nandini) have an increasing tendency to market staple products outside their respective domain. This is a flagrant violation of federal principles and the cooperative ethos on which the nation’s dairy cooperative movement was founded and fostered by pioneers such as Tribhuvandas Patel and Dr Verghese Kurien. This action goes against the fundamental principles of cooperation. “It is irrelevant whether a brand from another state will affect our market,” said Mani.

He stated that every federation has its designated domain and that Milma is only concerned with the cross-border sale of the Nandini brand of liquid milk, as other products are already available. “There is strong opposition in Karnataka to Amul’s (Gujarat Milk Cooperative Federation) plan to distribute its products there. How can the Karnataka Federation’s entry into Kerala be justified when Karnataka Milk Federation stakeholders are vehemently opposed to Amul’s introduction into their market? This is unethical and undermines the very purpose of the dairy cooperative movement in the United States,” he said.

Mani stated that Milma is one of the Karnataka Federation’s most important consumers. “When there is a milk shortage in Kerala, we purchase in bulk from Karnataka.” On occasion, we purchase 2,000,000 litres of milk per day from Nandini. Their plan to begin retail sales in Kerala is mutually destructive, as it will impair our interests.

Despite the fact that input costs in Kerala’s dairy industry are significantly higher than in other states, he asserted that the state’s dairy industry is the most profitable in the country.

Milma distributes 83 percent of its revenue to dairy producers through its network of cooperative societies. In addition, the majority of Milma’s surplus is distributed to producers as an incentive for milk price and a subsidy on cattle feed.

“It is in the best interest of dairy cooperative federations of various states to refrain from plans to open sales outlets or franchisee arrangements to sell liquid milk and other staple products outside of their respective state,” stated the Milma chairman.