Private brands hike milk, curd prices; 2nd in 7 months

CHENNAI: Private dairy companies have raised the retail prices of milk and curd for the second time this year by Rs 2 to Rs 4 per litre, taking the cumulative increase to as much as Rs 6 per litre since July, prompting milk dealers to warn of further shortage of Aavin milk unless the State government intervenes to boost production.

From Sunday, major dairy brands, including Tirumala, Srinivasa, Vallabha, Jersey, Heritage and Dodla, from neighbouring States rolled out fresh price revisions across Tamil Nadu.

The hike comes close on Arokya's Rs 4 per litre spike on July 9 and similar revisions implemented from July 21 by Tamil Nadu-based brands such as Amirthaa, Veda, Sun, Raj and Chakra — which effectively concludes that almost all leading private dairies have gone in for a price revision.

The Tamil Nadu Milk Dealers' Welfare Association attributed the hikes to an acute shortage of milk production in Tamil Nadu and neighbouring states, which has intensified competition among private dairies for milk procurement. Companies have been raising procurement prices and offering additional incentives to farmers to secure supplies while citing higher raw material and operational costs to justify the retail price spikes.

The association, however, alleged that private dairies have consistently overlooked milk dealers while repeatedly revising retail prices.

"Private companies don’t hesitate to increase retail prices whenever procurement costs rise. But they have failed to recognise the mounting financial burden on milk dealers, who continue to absorb higher fuel costs, vehicle maintenance expenses, shop rentals, employee wages and losses arising out of digital transactions," said S Ponnusamy, founder and State president of the association.

Demanding structural reforms, Ponnusamy urged private dairies to replace the existing fixed commission system with a percentage-based model, similar to that followed by the milk agents' cooperative MD Dairy, and introduce separate incentives for digital transactions so that distributors automatically benefit whenever retail prices are revised.

He said the latest hike would further widen the price gap between private milk brands and Aavin, which remains cheaper by nearly Rs 20 per litre in several categories, forcing more consumers, particularly lower- and middle-income families, to switch to the State-run brand.

The Tamil Nadu Milk Dealers' Welfare Association warned that unless the government launches substantial initiatives to increase milk production, private dairies would continue competing aggressively for procurement, weakening Aavin's supply base and making repeated retail price hikes inevitable.

"A surge in demand for Aavin without a corresponding increase in procurement will only worsen the existing shortage," S Ponnusamy, founder and State president of Tamil Nadu Milk Dealers' Welfare Association said.

The association also expressed concern over what it described as the government's lack of engagement with the issue. It claimed repeated attempts to secure appointments with Minister for Milk and Dairy Development C Vijayalakshmi and Chief Minister C Joseph Vijay to discuss the milk production crisis, alleged inaccuracies in data submitted by Aavin officials, and the demand for a separate welfare board for the dairy sector had not been successful.

Ponnusamy said such continued absence of intervention was eroding any hope that the current milk shortage could be addressed and called for immediate policy measures to stabilise production, safeguard Aavin's procurement network and prevent further price hikes.