Not Utterly, Butterly Delicious: What Is the Amul vs Aavin Controversy?

MK Stalin said that Amul’s decision to operate in TN "will create unhealthy competition between the cooperatives.”

On Thursday, 25 May, Tamil Nadu Chief Minister MK Stalin wrote to Union Home Minister Amit Shah, seeking his directions to stop Amul from procuring milk from the milk shed of state cooperative, Aavin, with immediate effect.

(Photo: iStock) 

Dairy giant Amul has been embroiled in a controversy with a diary corporation yet again. And this time too, it's in a southern state. The development comes just about a month after the brand faced a showdown with Karnataka’s local brand Nandini, and became an election talking point as the state went to the polls.

So, what is the new flashpoint involving two dairy corporations? And why has Amul been accused of infringement? We explain.

What Happened?

On Thursday, 25 May, Tamil Nadu Chief Minister MK Stalin wrote to Union Home Minister Amit Shah, seeking his directions to stop Amul from procuring milk from the milk shed of state cooperative Aavin, with immediate effect.

"It has come to our notice that the Kaira District Cooperative Milk Producers’ Union (Amul), has utilised their multi-state cooperative licence to install chilling centres and a processing plant in the Krishnagiri district and has planned to procure milk through farmer producer organisations (FPOs) and self-help groups in and around Krishnagiri, Dharmapuri, Vellore, Ranipet, Tirupathur, Kancheepuram and Tiruvallur districts in our state," Stalin said.

What Are the Other Allegations?

Stalin said that it had been a practice in India to allow cooperatives to thrive without infringing on each other’s milk shed area (a geographical area demarcated for collection of milk or milk products).

“Such cross-procurement goes against the spirit of “Operation White Flood (a programme that created a national milk grid linking producers throughout India to consumers in over 700 towns and cities and reducing seasonal and regional price variations while ensuring that producers get a major share of the profit by eliminating the middlemen) and could worsen the current milk shortage in the country, affecting consumers," the CM added.

He termed Amul’s actions “an infringement” on the dairy-producing area of Aavin.

“This act of Amul infringes on Aavin’s milk-shed area which has been nurtured in true cooperative spirit over decades. This will create unhealthy competition between cooperatives engaged in procuring and marketing milk and milk products,” the CM wrote in a letter to Shah.

The CM said that Amul’s decision to operate in Tamil Nadu is “unfortunate, detrimental to the interest of Aavin and will create unhealthy competition between the cooperatives.”

“Regional cooperatives have been the bedrock of dairy development in the states and are better placed to engage and nurture producers,” he added.

Sharing the letter on Twitter, the CM said, “The decision of Amul to operate in Tamil Nadu is unfortunate, detrimental to the interest of Aavin and will create unhealthy competition between the cooperatives.”

On 23 May, The New Indian Express had reported that Amul’s marketing division had issued advertisements inviting farmers to supply milk in the northern districts of Tamil Nadu. It also mentioned that the dairy giant had advertised to offer a higher price than Aavin – one or two rupees more per litre. 

"In Tamil Nadu, like in other states with strong dairy cooperatives, a three-tier dairy cooperative system is functioning effectively since 1981 for the benefit of the rural milk producers and consumers,” Stalin said in his letter to Shah.

The home minister, however, seems to have not yet responded to the CM's letter.

Dairy activity is now largely based on a three-tier system. It includes
village dairy cooperative societies (VDCS) or the primary cooperative society at the village level, district cooperative milk producers’ milk production at the district level, and a milk federation at the state level.

The main objective of this three-tier system is to delegate various functions ie milk collection by village dairy society at the village level, milk procurement and processing by the district milk union at the district level, and milk and milk products marketing by the state milk federation at the state level.

Why Now?

Stalin added that under the ambit of the Aavin co-operative, 9,673 milk producers and co-operative societies have been functioning in rural areas.

A Gujarat Cooperative Milk Marketing Federation source, who wished to remain anonymous, said that the issue has been raised probably with 2024 elections in mind, and probably after the Congress tasted victory by raising a similar issue against Amul in Karnataka.

“Amul has been procuring and processing milk in 15 states. Nothing can stop it,” the source told The Quint.

However, going by the data, Karnataka and Tamil Nadu are not comparable. To begin with, Aavin's average milk procurement is at about 35 lakh litres per day (LLPD), as against Nandini’s 80 LLPD.

Also, Tamil Nadu is a more competitive market. Of the estimated 60 LLPD of milk and curd sales in the state, Aavin’s share is only about 25 LLPD, according to The Indian Express.

The remaining 35 LLPD market is with organised private players such as Hatsun Agro Product (‘Aarokya’ brand), Heritage Foods, Dodla Dairy. and Creamline Dairy Products (‘Godrej Jersey’).

What Was the Amul vs Nandini Row?

Amul’s entry into market in Karnataka had angered pro-Kannada groups who believed this was not good news for the state’s local brand Nandini.

The controversy first erupted in December 2022 when Amit Shah called for “cooperation” between the cooperative-model-based dairy companies, Amul and Nandini, during a public meeting in Mandya.

The remark was criticised by rival political parties who alleged that the Bharatiya Janata Party (BJP), which was then in power in Karnataka, was attempting to merge Nandini with Amul, a move which they believed could be devastating for the Karnataka Milk Federation’s brand.

The row was reignited after Amul announced its entry into the fresh dairy market in Bengaluru on 5 April, by introducing fresh milk and curd.

The Congress, Janata Dal (Secular), and other pro-Kannada groups had alleged that the BJP was creating “artificial scarcity” in the state as production of Nandini milk dipped during summer.

They had further alleged that the BJP was giving back-door entry to Amul.