Increasing milk demand pushes private dairies to hike retail prices

A widening gap between the demand and supply of milk has led to several popular brands increasing prices of all variants such as full fat with 6% fat, toned (blue) with 3% fat, and standardised green with 4.5% fat.  

Milk industry sources said that there was a huge demand for milk as certain private dairies were procuring more than usual in the State. Farmers too, looking to gain from this, were demanding an increase in procurement price. They were getting around ₹40 per litre from private dairies. This has resulted in retail prices of milk going up by ₹2 or ₹3 per litre, shocking consumers.  

Milk industry expert M. Muthaiah said there is a difference of ₹16/litre between the price of Aavin full cream milk and milk from private brands. Aavin’s is priced at ₹60/ litre, which private brands cost ₹76/litre. Aavin card holders get it at a lesser price. “If they increase the sale of milk at the same selling price, they will only end up losing more,” he said.  

T. Sadagopan, President, Tamil Nadu Progressive Consumer Centre, said with the heat gradually increasing, an increase in prices of milk would automatically mean a hike in prices of buttermilk and allied products. “Already in many areas, small shops sell for ₹1 above the MRP. Consumers have no other go but to buy private milk brands since Aavin sells only 15 lakh litres of milk a day in the city,” he said.  

S.A. Ponnusamy, Tamil Nadu Milk Dealers’ Employees Welfare Association, alleged that the demand for milk and the resultant increase in procurement price and thereafter the sale price, was due to the failure of the State government. “It is the Dairy Development Department. We dont see an increase in milk production as cattle are very costly and ordinary farmers cannot afford to do so. The DMK government shelved the free cattle scheme introduced by former Chief Minister Jayalalithaa, which has led to the current sorry state of affairs,” he alleged.