The Tuesday Interview | 'No merger with Nandini, but India an open market'

Consumers will decide what they want to buy, and as responsible federations, we are both doing everything to benefit our farmers

Amul’s messages on social media platforms about fresh milk and curd supply in Bengaluru have triggered a controversy in Karnataka in the run-up to the Assembly elections. The Opposition is alleging that Gujarati products are being imposed on the state, to the detriment of Karnataka Milk Federation (KMF), a strong state cooperative. In an interview with Pavan Kumar H of DH, Jayen Mehta, managing director of Amul, says it is not ‘Amul vs Nandini’ but ‘Amul and Nandini’ in Karnataka. Excerpts:

Is KMF merging with Amul?

There was never a question of merging Amul with Nandini. The two federations were formed under the cooperative society Acts of two states. They are both farmer-owned cooperative federations working for the betterment of farmers. It is unfortunate that Amul is being pitted as a competitor to KMF in Karnataka. Given the price difference, Amul is not a competitor to KMF’s Nandini. We will not be able to compete with it in the next decade or so. Nandini sells its premium milk for Rs 44 a litre, whereas Amul sells toned milk for Rs 54 a litre. Similarly, Amul sells its pouched curd for Rs 66 a kg, whereas Nandini sells it for Rs 46. We do not intend to reduce our prices. We are looking into entering the e-commerce market, where the presence of milk cooperative federations is lower than 10%.

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Amul's social media posts about supplying fresh milk in Bengaluru created a stir in Karnataka. Is Amul entering the Karnataka daily milk market?

Amul has been in the Karnataka market since 2015. We have been supplying liquid milk and curd in Dharwad and Belagavi districts. However, compared to Nandini’s market share, our supply is negligible. While we supply 6,000 to 8,000 litres of milk a day, Nandini’s share is around 1.35 lakh litres a day in the two districts. The social media posts were intended to convey that soon people of Bengaluru would be able to buy fresh Amul milk and curd through e-commerce platforms. We used to get a lot of online queries for Amul products on these platforms from the area. Our milk and curd will only be available online.

What do you mean when you say Amul and KMF have been cooperating and co-existing in the market?

Amul and KMF share a healthy relationship and work closely. We have each other's back whenever needed. Three of KMF’s dairies – Mother Dairy in Bengaluru, and Ballari and Hassan Dairies--have been manufacturing and packing Amul ice cream since 1998. Similarly, two years ago, when KMF had surplus milk, it supplied cream to Amul to make cheddar cheese worth Rs 400 crore. When KMF intended to start a flavoured milk unit in Karnataka, officials from Karnataka visited our plants in Gujarat and got inputs. There are many such examples of the two federations working closely for the benefit and profit of farmers of both states.

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There is an unwritten rule that milk cooperative federations don't enter other states’ markets to compete. Then why is Amul selling its liquid milk and curd in the milk surplus state of Karnataka?

India is an open market. Any manufacturer can sell his product anywhere in India. We cannot oppose such a sale. Consumers will decide what they want to purchase, and as responsible federations, we are both doing everything to benefit our farmers.

Hashtags such as #BoycottAmul, #Amulgoback #SaveNandini are trending in Karnataka. The issue has also snowballed into Karnataka vs Gujarat.

These are unfortunate and unwanted developments. There is confusion among people that Amul will eat into the KMF market or that it is a merger, which is far from the truth. I cannot comment on the criticism that is thrown at us. All I can say is that at the management level of KMF and Amul, there is clarity that the two federations are not competitors but cooperators.