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Journalism of Courage
Ahead of the crucial state assembly elections 2023 in Karnataka, the Amul vs Nandini row has created a stir in the state, with opposition leaders and pro-Kannada groups attacking the government for allowing Amul to sell fresh milk and curd in Bengaluru. The critics believe that entry of Amul in the fresh milk market could spell trouble for Karnataka’s local brand, Nandini.
Here’s a breakdown of the controversy and how the Nandini brand is integral to Karnataka’s dairy market space.
The Amul-Nandini controversy dates back to December 2022, when Union Home Minister Amit Shah called for ‘cooperation’ between the cooperative-model-based dairy companies, Amul and Nandini, during a public meeting in Mandya. This led to sharp attacks from opposition parties who alleged that the BJP government is making efforts to merge Nandini with Amul and that it could have a devastating impact on Karnataka Milk Federation’s brand.
More recently, things got heated in the state when Amul on April 5 announced its entry into the fresh dairy market in Bengaluru, by introducing fresh milk and curd. This ruffled feathers among opposition parties like Congress, JDS, and pro-Kannada groups, who started trending #GoBackAmul, #SaveNandini campaigns on social media. With the production of Nandini milk dropping during the summer period, the opposition parties have alleged that the BJP government is creating an ‘artificial scarcity’ to give back door entry to Gujarat-based Amul.
Under the Nandini name, fresh milk and milk products, including curd, are sold. Karnataka Cooperative Milk Producers’ Federation Limited (KMF) is the apex body for the dairy co-operative movement in Karnataka that markets milk and milk products.
The KMF has had popular actors such as Dr Rajkumar, Upendra, and Puneeth Rajkumar as brand ambassadors over the years. Nandini has become a household name in Karnataka and is perhaps an ‘emotion’ for many families. The first dairy that went on to become KMF came into existence in 1955 in Kodagu district and by 1984 the popularity of the federation ensured that there were 14 district milk unions.
KMF now has 16 milk unions covering all the districts of Karnataka and they procure milk from primary Dairy Cooperative Societies (DCS) to distribute to the consumers in various towns/cities/rural markets in the state. The DCS at the village level and District Milk Unions (such as Bengaluru, Haveri, Belgaum Hassan milk unions) at the district level manage the procurement, processing and marketing of milk. They provide technical input services for enhancing milk production at producer level and to the federation at the state level to co-ordinate the growth of the dairy sector in the state.
KMF supplies to over 22,000 villages across Karnataka. The federation consists of over 24 lakh milk producers, procures over 81 lakh kgs of milk every day, sells over 42 lakh kgs of milk per day, consists of 17,000 milk cooperative societies and makes payment up to Rs 17 crore per day to farmers. The annual turnover of KMF is estimated at around Rs 14,000 crore, as of 2022-23 data.
The dairy market in Karnataka is strong in districts like Ramanagara, Channapatna, Kolar, Mandya, Mysuru, and Chamarajanagar, because a large chunk of farmers from these regions depends on dairy farming for their livelihood. In Bengaluru, nearly 25 lakh litres of milk is sold which predominantly is sourced from cooperatives like Mandya Tumkur, Kolar, and surrounding areas.
The government buys milk from the milk producers at Rs 33 per litre (a temporary arrangement from the usual Rs 31 per litre) and sells the milk (which includes 3% fat and 8.5% solids-not-fat) at a cost of Rs 40 per litre. However, the district milk unions have been demanding a hike in the procurement cost by at least Rs 5 and demanded that the government sell at Rs 50 for the customers, in order to help the dairy farmers prosper and meet the expensive operating costs.
According to members of KMF, Nandini holds over 90% of the market share in Karnataka for milk and milk products.
While KMF’s Nandini milk is the dominant player in the fresh milk market space, Amul occupies third or sometimes fourth place in the fresh milk market. Although Amul plans to enter the quick commerce platform in Bengaluru to sell milk, the Gujarat brand has been selling fresh milk in Belgaum and Hubli for the past eight years.
According to Jayen Mehta, managing director of Amul, the company sells 6000-8000 litres per day in the two cities, compared to Nandini’s 1.25-1.3 lakh litres per day. However, Amul’s Taaza milk, at Rs 54 per litre, is costlier by Rs 14 compared to Nandini.
KMF chairman Balachandra Jarkiholi ruled out the merger of Amul and Nandini and denied any threat to KMF-owned Nandini from Amul or any private brands that sell fresh milk and curd.
Jarkiholi also said, “There are already 10 private brands selling milk in Bengaluru. Despite all this no one is able to compete with Nandini because, of the price point. Nandini is selling milk at the cheapest rate.” Responding to the allegations of artificial scarcity, Jarkiholi said that this year KMF has collected 75 lakh litres of milk during the summer period so far, around 60,000 litres less compared to last year.
