When Business Rivalry meets Politics
In India, whenever we hear the word ‘milk’, two things come up in our mind – chai and the conscious alertness to see if the milk doesn’t boil off. While the milk keeps boiling, there is an intense controversy alongside – ‘boiling’ amongst two of the most popular milk cooperatives in India – Amul and Nandini.
The dairy industry in India is dominated by two co-operatives – Gujarat Cooperative Milk Marketing Federation’s Amul and the Karnataka Milk Federation’s Nandini. If you’re a desi citizen, you’ve probably heard of both of them. These co-operatives have revolutionised the dairy industry by empowering dairy farmers and promoting dairy farming throughout the country. Both are co-operatives born with one vision: to empower dairy farmers. Undoubtedly, both the co-operatives succeeded in their vision, and have been super successful throughout the country.
Recently controversy has ‘boiled’ between Amul and Nandini. While this was supposed to be a co-operate and business rivalry, political parties also started getting involved right before the elections. This only further fueled the controversy. But what’s the matter?
You see – Amul was founded in 1946 and it has ever since been a pioneer in the dairy industry in India. It has empowered dairy farmers by providing them with a fair price for their milk and thus has become the largest seller of milk products in the country. Recently, Amul is currently looking forward to expanding its units and capturing a larger audience by targeting the South.
While in the Northern parts of India, Amul is the largest milk seller; it does not have a big influence in the Southern parts of India. In the southern region, it was Nandini.
Nandini was founded in 1984 and has been ruling the dairy market in southern India with a 65% market share. Moreover, Nandini is the 2nd largest milk seller in India after Amul. It procures milk largely from Mysore and Central Karnataka. Apart from Karnataka and Mysore, it sells milk in the neighbouring Tamil Nadu, Telangana, and Kerala as well – all of the regions where Amul has been weak. Karnataka Milk Federation is the second-largest dairy co-operative in the country after Amul.
Nandini rules the dairy market in southern India, while Amul is the largest seller of milk products in the country.
Amul is finally entering Karnataka. But why? Over the years we have seen a huge number of people moving into southern states like Bangalore for jobs and better opportunities. With more people from northern India moving to Bengaluru for better opportunities, Amul’s is losing most of its northern audience. Moreover, having a big reach and expanding ultimately brings more profit to the company – partly the reason why Amul is available in over 40 countries.
While Amul aims to capture a larger audience, it is facing stiff competition from Nandini.
Nandini has the advantage of providing fresher milk at cheaper rates. You see, Amul gets its milk from various far fetched states like Goa which result in less fresh milk. Additionally with one litre of milk at Nandini costing Rs. 39, Amul will cost Rs. 54 – Rs. 64, thus making Nandini the cheaper option for many.
The controversy between Amul and Nandini triggered a political fight between the BJP and Congress right before the elections. Union Home Minister Amit Shah, who is also the Minister of Cooperation, stated that Amul and Nandini together will work towards setting up a primary dairy in every village of Karnataka. Activists and citizens from Karnataka expressed fear that the central government may merge the Nandini with Amul.
During the same like, Social media platforms were abuzz with “boiling” hashtags like ‘#SaveKMF’ and ‘#AmulGoBack’ trending on Twitter.
Nandini and KMF officials have recently stated that the cooperative is facing a supply shortage – due to an increase in demand for milk and cases of lumpy skin disease in cattle. This reduced the production of milk in Karnataka. However, many officials seem to deny this claim of a shortage in milk supply – the argument being that the farmers are turning to private and multinational companies due to better prices.
Critics like farmer leader Kurubur Shanthakumar alleged that after the WTO agreement, multinational companies entered the market, resulting in the weakening of the KMF and reduced supplies.
The controversy between Amul and Nandini is a classic example of competition in the dairy industry. While Amul is looking to expand and capture a larger audience in the South, Nandini has the advantage of being the cheapest dairy brand in the country and providing fresher milk.
It remains to be seen how the situation will unfold and what the future holds for the two cooperatives in the dairy industry.
