Financial Daily from THE HINDU group of publications
Thursday, Apr 21, 2005
Agri-Biz & Commodities
Dairy & Dairy Products
Amul entry turns sour for West Bengal
Kolkata , April 20
APART from the MNCs, the country's largest milk cooperative Amul has found in the West Bengal a strong opponent, according to the Animal Resource Minister, Mr Anisur Rahaman.
Addressing a meeting at the Bengal National Chamber of Commerce here on Wednesday, the Minister described Amul's entry in West Bengal market as the "most unfortunate".
He also accused Gujarat Cooperative Milk Marketing Federation (GCMMF), the owner of Amul brand, of "doing business in an unethical manner".
The Minister was in the news recently when his department accused an Amul packaging unit in the city suburbs for processing more milk than the approved capacity.
Entering the Kolkata market in January 2005, Amul has been successful in capturing a sizable market share, selling roughly two lakh litres out of a total market of eight to nine lakh litres a day.
"It is most unfortunate that Amul has come here. I had personally expressed my opposition to Dr Kurien earlier," he said adding, "Amul is dumping cheap milk from Gujarat to West Bengal."
The Minister said Amul had adopted unethical business practices to secure higher market share in the State. "However, I think now their sales have dropped," he said.
Mr R.S. Sodhi, Chief General Manager of GCMMF, countered Mr Rehman's claims of dumping milk from Gujarat.
"First, it is economically unviable to import milk all the way from Gujarat as landed price is higher by Rs 2 a litre. Second, we are currently bringing roughly 20 per cent of our total requirement (of four lakh litre in West Bengal ) from the neighbouring Andhra Pradesh purely to bridge the deficit," he said.
"We had always assured the milk federation in West Bengal, and the State Government as well that we would buy as much as they could supply. In fact, wherever we operate, we stress on local procurement keeping in tune with our motto of marketing fresh milk.."
Interestingly that "the State is a laggard in milk production in the country" was admitted even by Mr Rahaman.
Mr Sodhi said: "Enquiries will reveal that before Amul's entry, the dairies in West Bengal had been traditionally living on milk powder imports from the northern dairies just because it was a much cheaper option. Amul has not only reversed the trend but has actually helped the State to develop milk farmers and milk production."
Refuting allegations of unethical practices, Mr Sodhi said the cooperative was doing business within the legal framework.
"We are not interested in being at loggerheads with the Minister. I think he is concerned about the welfare of West Bengal milk farmers. We assure him full cooperation in this regard. I am sure he will be convinced in the long run," Mr Sodhi added.
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