Milk war hots up: Amul’s entry has Karnataka on the boil

The Karnataka milk cooperative industry is upset with Amul's entry in the state. The Gujarat cooperative is breaking an 'unwritten rule' and competition can get unhealthy, they feel

Amul dairy brand in Bengaluru
Many netizens strongly objected to Amul's move into Karnataka and a hashtag 'Go Back Amul' quickly appeared online

The Gujarat Cooperative Milk Marketing Federation-run Amul has announced it is entering the Karnataka market,  much to the consternation of the state’s hugely successful Karnataka Cooperative Milk Producers’ Federation (KMF) with its signature product,  Nandini.

It is no surprise that the promoters of Nandini are upset by this move. Considered to be the second largest dairy co-operative in the country after Gujarat, KMF officials feel the milk and curd products of the Gujarat-based dairy cooperative society, with a turnover of over ₹55,055 crore, will cut into Nandini’s market share, especially in Bengaluru city.

Amul eyes tech-city Bengaluru

Amul is entering the Karnataka market by first targeting the capital city of Bengaluru which happens to be the highest consumer of milk and milk products in the state.

On April 5, the milk cooperative industry in the state was shaken by the news when the Amul cooperative announced on its Twitter account Amul.Coop that, “A New wave of freshness with milk and curd is coming to Bengaluru. More information coming soon,” said the tweet attached with a launch alert tag. Also, with the same tag, it tweeted, “The AMUL family is bringing in some Taaza into Bengaluru city. More updates coming soon”.

Later Amul, in its launch alert, had also tweeted, “Amul is bringing to you new freshness in the form of milk and curd. Available on quick commerce platforms, they can be ordered to your doorstep,” it said, thus emphasising that Amul Milk and curd are already in the Bengaluru market. The message was carried in Kannada as well as in English to get the message to the local market.

Many netizens published the news by Amul on Twitter on their social media handles, and strongly objected to this move. A hashtag with ‘Go Back Amul’ quickly appeared online.

Also read: Amit Shah milks benefits of Amul-Nandini merger during visit, triggers political storm

Eyeing the Hindi speaking consumers?

A KMF official said that the Gujarat lobby is trying to sell Amul milk in a city like Bengaluru, where around 10 per cent of the population is Hindi-speaking and hail from the northern states. Residents living in huge multiplexes around the city are regular consumers of Nandini milk. And, Amul is trying to capture this business by targeting the north Indian community living in the large apartment complexes, he said.

Also, a few days ago, Kannadigas were outraged by the central government’s order to add the Hindi ‘Dahi’ on Nandini’s yoghurt packets. But, after a lot of opposition to this move, the government backed down and the order was revoked.

According to Ramakrishna Gowda, a director of the milk union in Mandya, the dairy industry in Karnataka is already hit due to challenges like lumpy skin disease in cattle.  “Due to this, for the last three to four months, milk production has not been on par with the market demand. There is a shortage of milk in many parts of the state, including the capital Bangalore. Amul is trying to capitalise in on this situation in Karnataka and to enter the milk market, which will negatively affect the sales of Nandini milk,” he warned.

Talk of merging Amul and Nandini

The first hint of Amul entering the Karnataka market came in December 2022, when Union home minister Amit Shah inaugurated the Mega Dairy at Mandya, established by the Mandya District Milk Union (MANMUL). In his speech, Shah said Amul and Nandini should work together pointing out that KMF will benefit from the technical support and cooperation from Amul. Further, he reiterated that if Karnataka and Gujarat milk federations come together, it would benefit farmers all over the country.

“Amul and Nandini need to work together to establish a primary dairy in every village in Karnataka. The National Dairy Development Board (NDDB) and the Ministry of Cooperation will work on this. In the next three years, there will not be a single village in Karnataka without a primary dairy, he said. But, his statement seemed to suggest a merger of the two milk federations, which immediately drew flak from milk producers of the state, as well as BJP’s political opponents.

A campaign called #SaveNandini was flagged off on social media. Also, many leaders including former CM Siddaramaiah, former CM HD Kumaraswamy, and KPCC president DK Shivakumar slammed Amit Shah’s statement. As the row started hotting up, Chief Minister Basavaraj Bommai and his cabinet colleagues stepped in to clarify that Amit Shah did not mean that there would be a ‘merger’, instead he had talked merely about cooperation between the two milk federations.

Also read: ‘Thayir, not dahi’: FSSAI allows labelling curd in any Indian language amid row

Unhealthy competition for Nandini

BC Satish, KMF managing director, brushed aside any competition from Amul for Nandini. “Nandini is a household name because of its quality, price point and for being a local product,” he told the media. However, he also spoke of an “unwritten rule” that is observed by the two milk federations.

“We do not supply Nandini milk and milk-based products to the state of Gujarat; and they are not supposed to supply Amul milk in Karnataka. That is the unwritten rule. Now, Amul is breaking that rule and the competition is turning unhealthy,” said Satish.

Further, he added, “Let there be a principle of cooperation. A letter will be written to the Amul Board of Directors and the National Dairy Development Board (NDDB) requesting them not to enter into unhealthy competition with us. We are confident that they will respond to us positively.”

AS Premnath, who was formerly KMF MD, told the media that in a free market system, products can be sold anywhere but there is an unwritten agreement to cooperate among themselves.

“Amul and Nandini brand have their market and are doing business in states where there is a milk shortage. The problem can be resolved through mutual discussions. Dairy giant Amul had earlier expressed interest in expanding milk sales in Karnataka. Now, it has crossed the line and jumped in,” he said.

Further, Premnath added that it is not possible for fresh milk to come from Gujarat to distant Karnataka. “Even if quality Nandini milk is available, there are chances the Amul brand will attract people from outside the state living in Karnataka. This will harm the KMF organisation and the welfare of the farmers,” he stressed, adding that the KMF management should strongly oppose the direct selling of Amul products.

Premnath suggested that if necessary, the state government should put pressure on the Gujarat government.

Gujarat’s Amul has opened Twitter and Facebook accounts in Kannada. Information has been provided in Kannada, but it has not yet set the price of one litre of milk. “We have to see how much one litre of Amul milk will cost. We are also ready to face the competition,” said BAMUL (Bengaluru Milk Union Limited) president Narasimhamurthy. He also said that there was no need for competition between the two public institutions.

Pledge not to buy Amul products: Siddaramaiah

Nandini is linked to Kannadiga pride for political parties in the state.

State Opposition leader Siddaramaiah urged Kannadigas to unanimously resist the usurping of KMF, which is built for the welfare of the farmers of the state. “All Kannadigas should pledge not to buy Amul products. Chief Minister Basavaraja Bommai should immediately intervene and stop Amul from entering through the back door,” he said, adding that ‘#SaveNandini #SaveKMF’ should be the state’s motto.

He lashed out at Prime Minister Narendra Modi and Union cooperation minister Amit Shah for being the reason behind all efforts to kill the KMF, which is the livelihood of millions of dairy farming families. And, he attacked the weak leadership of the state BJP unit, for caving in to the demands of the central high command.

“Banks built by our elders in Karnataka were eaten up. Modi and Shah have hatched a plan to kill the brand  Nandini, which is a Sanjeevini of the farmers. The state’s dairy industry has been on tenderhooks after Shah proposed the merger of KMF and Amul,” he added.

Further, he pointed out that Nandini milk and yoghurt have disappeared in the state the past few days. “At the same time, the sales of Amul products have taken off with a bang. All this is happening under the direct supervision of Amit Shah. Gujarat-based Amul had earlier tried to enter the Karnataka market by selling milk and yoghurt. We did not allow it. Now the BJP has extended a red carpet welcome,” he alleged.

“Milk stock in KMF has slumped in the BJP regime. 99 lakh litres of milk should be collected per day, but only 71 lakh litres of milk is being collected. Is this a conspiracy against the KMF? In addition to language hegemony through the imposition of Hindi and Maharashtra trespassing into the state by extending their health insurance scheme to Karnataka border villages, now the BJP government is going to betray the farmers by shutting down the KMF, he said.