The cooperative dairies in Telangana are forging alliances and slashing milk prices even while paying attractive prices to dairy farmers, making it difficult for private dairies to match retail prices and profit margins, reports ET.
After Gujarat Cooperative Milk Marketing Federation’s Amul and NDDB’s Mother Dairy slashed milk prices in Telangana market a few months back, Karnataka Milk Federation’s Nandini made an aggressive foray into the market of India’s newest state with lowest ever prices in the recent years.
With Telangana dairy cooperative forging alliances with many of its counterparts, some private sector dairy firms suspect foul play to cripple the private sector, apart from targeting Andhra Pradesh Chief Minister N Chandrababu Naidu-founded Heritage Foods in the region.
A few months before Amul, Mother Dairy and Karnataka Milk Federation’s Nandini resorted to aggressive strategies in the Rs 3,500-crore Hyderabad market, milk prices were hovering around Rs 44 a litre. Aggressive price wars by cooperatives led to prices falling to as low as Rs 33 per litre by most players over the past few months.
India is the world’s largest dairy market with a size of $60 billion (around Rs 3.81 lakh crore), accounting for 15% of global milk production in terms of value.
Though the Indian dairy industry has been growing at 10-12 % a year, the organised players saw 1520% growth a year over the past few years.