GCMMF selling skimmed milk powder, liquid milk to Mother Dairy

Harish Damodaran

A new entente


Sources say

that the coming together has also been forced by the milk shortage in Delhi. With skimmed milk powder prices ruling at record highs and Mother Dairy holding little stocks to last through the winter, it was left with no choice but to source milk and powder from its co-operative rival after a two-year gap.

New Delhi, July 16

In what appears to be a new entente in the post-Verghese Kurien era, the Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) or `Amul' and Mother Dairy India Ltd are back to doing business with each other in a big way.

Since March around the time of Dr Kurien's exit as GCMMF Chairman the Rs 3,775-crore federation has sold over 8,000 tonnes of skimmed milk powder (SMP) to Mother Dairy, a subsidiary of the Dr Amrita Patel-headed National Dairy Development Board (NDDB).

What is more, GCMMF has from June 1 onwards been supplying one lakh litres per day (LLPD) of liquid milk to Mother Dairy for covering its shortfall in the Delhi market. This is over and above the 2.8-LLPD that GCMMF is now selling under its own `Amul' brand in the national capital.

The renewal of ties between the country's two dairy giants is in contrast to the marked animosity that came out in the open sometime in late-2002. Since then, the two were engaged in a no-holds-barred battle in the marketplace, as Mother Dairy launched its own butter to take on GCMMF's entrenched product and the latter retaliated by selling ice-cream in Delhi. The war eventually extended to liquid milk as well, with GCMMF marketing `Amul' milk in Delhi and Mother Dairy likewise entering Gujarat.

While Dr Kurien's departure may have partially facilitated an easing of tensions, sources say that the coming together has also been forced by the milk shortage in Delhi. With SMP prices ruling at record highs and Mother Dairy holding little stocks to last through the winter, it was left with no choice but to source milk and powder from its co-operative rival after a two-year gap. GCMMF, in turn, had to supply the necessary quantities, failing which there was the threat of NDDB contracting large-scale SMP imports, as it did in late-2003.

The other sign of old alliances being re-forged is the proposal to appoint the new GCMMF Chairman, Mr Parthibhai Bhatol, on NDDB's board. This follows Dr Patel's induction, last month, onto GCMMF's board as a `special invitee'. But the present thaw does not signal a complete cessation of hostilities either. Mother Dairy, for one, has shown no intentions of withdrawing from GCMMF's backyard. It is now marketing around 40,000 litres of milk daily in Ahmedabad and Gandhinagar.

Related Stories:
Amul, NDDB back to doing business with each other
Mother Dairy to foray into processed cheese segment
Amul enters Delhi ice cream market -- In 'co-operative competition ' with Mother Dairy

(This article was published in the Business Line print edition dated July 17, 2006)
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