GCMMF warns of ‘dent to Amul brand’ as Dudhsagar Dairy threatens to exithttps://indianexpress.com/article/business/companies/gcmmf-warns-of-dent-to-amul-brand-as-dudhsagar-dairy-threatens-to-exit-5689482/

GCMMF warns of ‘dent to Amul brand’ as Dudhsagar Dairy threatens to exit

Notably, the development comes on the eve of the Lok Sabha elections in Gujarat, where the milk cooperatives have considerable political clout and are run by politicians.

GCMMF warns of ‘dent to Amul brand’ as Dudhsagar Dairy threatens to exit
Sources say that in the wake of Lok Sabha elections, the tiff between GCMMF and Dudhsagar dairy has turned into a BJP versus Congress battle with a number of members on board of Dudhsagar dairy supporting the Congress party.

Trouble is brewing between Gujarat apex milk marketing body —- Gujarat Cooperative Milk Marketing Federation (GCMMF) that owns and markets Amul brand of products — and one of its member union, Mehsana District Cooperative Milk Producers’ Union Limited that operates Dudhsagar Dairy in Mehsana. With Dudhsagar Dairy threatening to pull out of the Federation, the managing director of GCMMF, R S Sodhi, on Monday said that such a move by a founder member would not only dent Amul’s image, but would also cause “irreparable damage to debt-ridden Dudhsagar Dairy”.

Notably, the development comes on the eve of the Lok Sabha elections in Gujarat, where the milk cooperatives have considerable political clout and are run by politicians.

“They (Dudhsagar Dairy) are saying that they would exit the Amul Federation and sell milk in Delhi under their own by brand by adopting the Multi-State Cooperative Societies Act. It will surely be a loss for us as they are among the founding members, and such an action would affect  Amul’s image,” Sodhi told mediapersons at his Anand office.

The tiff between the GCMMF and its member came to the fore after Dudhsagar Dairy reportedly started facing difficulty in providing adequate remuneration to farmers supplying milk to the dairy in the past couple of months.

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Sources say that in the wake of Lok Sabha elections, the tiff between GCMMF and Dudhsagar dairy has turned into a BJP versus Congress battle with a number of members on board of Dudhsagar dairy supporting the Congress party. Though the head of the dairy Ashaben Thakor was not reachable, the vice-chairman of the dairy Mogajibhai Patel told a news channel that the GCMMF has stalled payments worth Rs 362 crore for the past one year and has reduced the dairy’s sale of milk in Delhi market. “We have done business independently before, and we are ready to do it again,” said Patel.

Meanwhile, deputy chief minister Nitin Patel while speaking to mediapersons on Mnday said, “We were watching the press conference held by the MD of Amul. Tomorrow 26 seats are going to polls and so we are keeping a watch to ensure that there are no misunderstandings and the Congress does not spread any misinformation at the last minute… Dudhsagar which has been unable to pay remuneration at par with other dairies like Banas and Sabar, has been trying to politicise the issue. We are happy that Sodhi has clarified,” said Patel while adding that the BJP government has no role in running of the milk cooperatives, it would intervene if Dudhsagar approached them. It is common knowledge that most of the milk unions within the GCMMF are controlled by the BJP.

“Dudhsagar Dairy has been making allegations against our Federation, saying that their milk capacity is not being utlitised, and that the Federation is not paying them and their milk is not being sold in Delhi market. So, we thought it necessary to clarify these allegations,” Sodhi said, adding that Dudhsagar Dairy’s daily milk collection rose by only 1 lakh litres to 19 lakh litres, this year.

“Their (Dudhsagar Dairy) milk processing capacity in Mehsana is 33 lakh litres and they have an additional 40 lakh litres capacity in Delhi. But they are able to collect about 19 lakh litres (daily) in Gujarat and about 9 lakh litres outside the state. They have also made an investment of an estimated Rs 1,500 crore for capacity expansion. If they do not have milk, how are they going to use the capacity,” he asked, while adding that Dudhsagar Dairy has an interest burden of Rs 300-400 crore on the Rs 1,500 crore loan taken from banks.

Sodhi also said that the Dudhsagar Dairy has bought a “posh guesthouse, worth Rs 20 crore, in south Delhi” and opened a new office in Ahmedabad, “which none of the federation members have done since marketing of milk and milk products is completely handled by the GCMMF”.

“They (Dudhsagar Dairy) have been making allegations that the federation is not giving money for the milk sourced from Dudhsagar. Mehsana does a business of Rs 300 crore every month with the Federation. For April month, we have already paid Rs 210 crore. So, where is the pendency in payment?” Sodhi said.

Sodhi said that Dudhsagar Dairy’s exit from the Federation would instead “benefit” member farmers “as they will be able to sell their milk to nearby Sagar and Banas dairies that are offering Rs 5 per litre more than what Dudhsagar is currently paying”.

The GCMMF has 18 cooperative milk unions under its wing, including the Mehsana union.