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Our Bureau

Thiruvananthapuram, June 10

HUGE operational losses have forced the Kerala Co-operative Milk Marketing Federation (Milma) to call off the joint venture marketing arrangement with Mother Dairy Foods Ltd, a subsidiary of the National Dairy Development Board (NDDB).

A general body meeting of Milma adopted a unanimous decision to this effect on Wednesday, a report on which would be placed before the State Government for its concurrence.

The Chairman of Milma, Mr P.T. Gopala Kurup, said that while taking the decision, the general body had also taken on record the strong protests mounted by the producers' unions in Thiruvananthapuram and Malabar. These unions had incurred substantial operational losses, which they attributed to the flip-flop arrangement with Mother Dairy Foods.

The joint venture firm, called Milma Foods, was institutionalised in June last year solely with the purpose of handling the marketing activities for Milma along professional lines. NDDB had the majority stake in the company, with Milma's regional cooperative producers' unions being vested with the responsibility of procurement and supply of milk.

The procured stock would be transferred to the Milma Foods Ltd for a `fixed stock transfer price'. The new company was to be responsible for all promotional activities in the market.

The understanding was that any increase in the cost of procurement and processing would be set off through an increase in the volume of sales.

But the going had been anything but smooth for the entities involved, with the Thiruvananthapuram Regional Co-operative Producers' Union (TRCMPU) firing the first salvo as early as in January over the huge losses Milma Foods had run up by procuring milk at allegedly inflated prices from Karnataka.

The unions went so far as to refuse to renew the supply contract with Milma Foods, till such time as the company made good the losses.

More Stories on : Alliances & Joint Ventures | Dairy & Dairy Products | Kerala

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