Milma, the popular brand owned by the Kerala Co-operative Milk Marketing Federation (KCMMF), has responded to the recent move by certain state milk marketing federations to expand their operations into markets beyond their own states, terming it as "unethical."
Milma expressed its dismay at the Karnataka Milk Marketing Federation's decision to establish outlets in parts of Kerala to sell its Nandini brand of milk and other dairy products. Milma believes that such actions represent a complete disregard for the cooperative principles on which the dairy sector is based.
The KCMMF accused the Karnataka Milk Marketing Federation of violating the cooperative spirit that has been the cornerstone of India's dairy sector, which aims to benefit millions of dairy 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 co-operative spirit based on which the country's dairy co-operative movement has been built and nurtured by pioneers like Tribhuvandas Patel and Dr Verghese Kurien", Milma Chairman K S Mani said in a statement Bengaluru.
He noted that the move of Amul to promote its staple products in Karnataka has been met with strong resistance from the stakeholders in that state.
Members of pro-Kannada organisation 'Kannada Rakshana Vedike' stage a protesting against the entry of Amul products in Karnataka market, in Bengaluru | PTI
"But Karnataka Milk Marketing Federation recently opened its outlets in parts of Kerala to sell its Nandini brand of milk and other products. How could this be justified? Whoever does this, it is a highly unethical practice which defeats the very purpose of India's dairy movement and harms the interests of the farmers," Mani said.
This trend will only lead to unhealthy competition among states, which needs to be reined in with the Union and state governments coming together to evolve a consensus, Mani said.
As per the prevailing agreement and courteous business relations existing among Milk Co-operatives, cross-border marketing of liquid milk shall be avoided as it amounts to blatant encroachment of the sale area of the respective state, he said.
Such practices from any side will jeopardise the spirit of co-operative principles that have been nurtured for long by mutual consent and goodwill, Mani said.
According to the chairman of Milma, the practice of expanding operations beyond one's territory by establishing sales outlets or partnering with franchisees is undesirable. Such expansion often begins with the sale of value-added products, which later progresses to liquid milk, and finally to doorstep deliveries of milk.
The chairman also expressed concern that such expansions often lead to an attempt to capture markets outside of their designated area, leveraging the differences in pricing and production costs between states. Therefore, Milma advocates for a cooperative approach among dairy federations and encourages them to respect each other's boundaries and work towards collective growth and development.
Though the input cost in the dairy sector in Kerala is much higher compared to other states, Milma passes on 83 per cent of its turnover to dairy farmers through the cooperative societies in its network.
Also, the bulk of Milma's surplus is given to the farmers as an additional incentive on milk price and subsidy on cattle feed as the well-being of the dairy farmers is its prime concern.
Considering these stark realities, it is in the best interest of dairy co-operative federations of various states that they refrain from plans to open sales outlets or make franchisee arrangements to sell liquid milk and other staple products outside the respective state, Mani added.
(With inputs from PTI)
