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Milk war by two co-operative giants is affecting smaller private players
 
Milk war by two co-operative giants is affecting smaller private players
Logically, a co-operative fighting another should harm the sector on the whole.Instead ,the milk war unleashed by two co-operative giants, much on the lines of Coca-Cola and PepsiCo , is affecting the smaller private players in the business here.Much to the chagrin of Gujarat Milk Marketing Federation (GCMMF) which owns the dominant Amul brand ,the National Dairy Development Board (NDDB) launched its Sugam brand of liquid pasteurised milk in Guajrat a couple of months ago.

Today, NBBD claims it sells around 40,000 litres of the new brand every day.GCMMFs Amul says aggressive marketing ,on the back of the Sugam launch ,has helped it increase annual sales by 30,000 litres, taking it to 5 lakh litres.Industry sources say an additional supply of 70,000 litres of milk has made a dent into the market of smaller dairies.The total milk market in Ahemdabad alone is 10 lakh litres a day of which approximately 1.75 lakh litres is milk pouches sold by smaller private companies and around 3.50 lakh litres is loose milk.

With both the giants offering great margins and various offers to middle men, the smaller players are left struggling.Both Amul and Sugam have adopted an aggressive door-to-door marketing strategy, Sugam offers a commission of close to Rs 6 per 20 pouches plus two additional pouches.GCMMF, which used to offer a commission of only Rs 4, has now been forced to increase it by Rs 2 per every 24 pouches.This, say industry sources, would surely affect GCMMFs bottomline.
Posted On : 2/13/2006 12:51:32 PM

 
 
 
Milk war by two co-operative giants is affecting smaller private players