KMF to write to Amul appealing against venturing into Karnataka, a milk-excess market

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Amid uproar over the entry of milk behemoth Amul into the Bengaluru market to compete with Nandini milk, the Karnataka Milk Federation (KMF) will raise the issue of competition between two successful milk cooperative models at the national level even as the timing of the announcement, ahead of the Assembly elections, is being speculated.

The KMF, which competes with Amul in neutral regions in Mumbai, Nagpur, Goa, Hyderabad, and Chennai markets, will raise the issue of competition between the two cooperatives with the dairy industry body — the National Dairy Development Board. Further, it will also write to Amul, requesting the largest cooperative not to venture into Karnataka, a milk excess State. “It makes little sense for two successful cooperative bodies to fight in a milk-excess State and hurt each other’s business interests that could favour private players. Instead, the competition to market milk should be in milk-deficient States, which will help the two cooperatives, as well as the consuming public,” KMF sources said and added that there was an unwritten understanding that the two would not enter each other’s home turf.

Currently, it is estimated that Bengaluru consumes about 33 lakh litres of milk and curd daily of which about 27 lakh litres, including 23 lakh litres of milk, is supplied by the KMF through four district milk unions of Bengaluru, Kolar, Tumakuru, and Mandya besides Mother Dairy. The rest of the supply comes through nearly a dozen small and big private dairies besides the loose milk that is sold to individual homes.

At ₹39 a litre, Nandini toned milk is the cheapest in South India. Amul, in its announcement on Thursday, has priced its Taaza at ₹27 and Amul Gold Special at ₹32 for half a litre. Amul curd is priced at ₹30 for half a litre while Nandini curd is priced at ₹24 for half a litre. On April 5, Amul took to Twitter to announce the supply of fresh milk and curd in Bengaluru through online platform, which resulted in severe backlash in social media platforms. Amul is yet to announce the launch date.

KMF sources said Amul for the past seven years was already selling milk in small quantities in Hubballi and Belagavi, which is mostly sourced from Goa. The announcement comes in the backdrop of suspicion in Karnataka over moves to merge the KMF with Gujarat -based Amul. The talk of cooperation between the two big cooperatives in the country by Union Home Minister Amit Shah at Mandya in December had raised speculation of merger, and had turned into a political slugfest.

The speculation in the milk industry here is that Amul, which has tied up with the Andhra Pradesh government to revive the cooperative milk sector in the State, could bring milk from the bordering districts in the neighbouring State. “The KMF is geared up for competition, and we believe that Amul will not be able to match us in price or supply chain in the Karnataka market,” KMF sources said.