Why Milma is wary of Nandini's entry into Kerala market

After Nandini vs Amul debate took the centrestage in Karnataka's election battle, another milk war is brewing in Kerala- Milma vs Nandini.

The Kerala Cooperative Milk Marketing Federation is at loggerheads with Karnataka Cooperative Milk Producers' Federation Limited (KMMF) after the latter rolled out new outlets in the state without its consultation. Nandini, the trade name used by KMMF, has already launched six outlets in the state and is set to open three more. Nandini is planning to open at least one of its outlets in every taluk of Kerala in the next two years.

While Kerala's Milma has clarified that it is not against the sale of Nandini's value added products but only the sale of milk packets, the brand is visibly threatened by second largest milk producer in the country. Nandini, which procures around 81 lakh kilolitres of milk per day, had a turnover of Rs 19,784 crore in FY22. Compare this to Milma, which has a procurement of 14 lakh litres a day and a turnover of Rs 4,300 crore in FY22.

The Kerala's Minister for Animal Husbandry, Dairy Development, Milk Co-operatives J Chinchurani has stated that Nandini's entry into Kerala market is unfair as the very rules governing such cooperatives restrict the sale of the product in a certain region. Both are government-run organisations functioning in the cooperative model.

Dairy farmers likely to be affected

“We are not against their entry into the Kerala market. Amul has ben marketing milk products in the state for years now. The sale of milk packets by Nandini is what we are concerned about. It could adversely affect the dairy farmers in the state,” says KS Mani, Milma's chairman told Onmanorama.

Milma was started for the dairy farmers of Kerala 42 years ago. Over 10 lakh dairy farmers are part of 3,200 dairy cooperatives across Kerala today.

“Kerala farmers are getting the highest value for milk in the country. Besides a subsidy of Rs 4 (Rs3 from local administration and Re 1 from dairy department), the profits generated are also passed on to them as additional milk value and statutory subsidy,” Mani said.

It is estimated that at least 83 per cent of Milma's income goes to its dairy farmers.

Milk prices

Currently, the most popularly consumed Milma milk packet is offered at a lesser price in Kerala. While Milma's homogenised toned 500ml milk is sold at Rs 26, Nandini's milk packet costs Rs 27 in Kerala.

However, since the procurement price for Nandini in Karnataka is much lower compared to Milma, the chances that it will slash down prices in Kerala are high.

Milk deficit

The Karnataka cooperative has said that they would be supplying a quantity of 25,000 litres of milk per day in the initial phase and that they are looking at filling the deficit of 2.5 lakh litres milk per day in the Kerala market.

According to KS Mani, Milma used to purchase milk up to 2 lakh litres from Nandini to meet the deficit.

“Karnataka and Tamil Nadu discontinued the milk supply a few months ago stating they had a deficit in their respective states. We had to purchase from Andhra Pradesh and Maharashtra as a result. Nandini's argument is not valid as Milma is ready to procure milk from them to meet the deficit,” he said.

Future strategy

The Kerala government has approached the National Dairy Development Board (NDDB) to resolve the issue between Milma and Nandini milk brands in the state.

“I've raised the issue at an NDDB meeting. They have assured us that they'll summon a meeting to address it at the earliest,” says Mani.

The Milma chairman however, says that the milk cooperative will continue its efforts to improve its production irrespective of Nandini's entry. The brand is also planning to improve its presence in Karnataka and Tamil Nadu sell its milk products.