Aavin on Saturday announced new prices after the rate reduction announced by the State government on Friday. Half a litre of toned milk (blue packet) will now cost ₹20 in place of ₹21.50 and monthly card holders would have to pay ₹18.50.
Standardised milk (green magic) would now be priced ₹22 (500 ml), full cream milk (orange packs) ₹24 (500 ml) and double toned milk (purple packs) ₹18.50 (500 ml).
For a 30-day cycle, cardholders would pay ₹555 for 500 ml toned milk, ₹630 for 500 ml standardised milk, ₹690 for 500 ml full cream milk and ₹540 for 500 ml of double toned milk. Cardholders who paid in advance are being told that the excess amount would be adjusted next month.
This reduction by ₹3 per litre would lead to an additional expense of ₹270 crore annually for the Tamil Nadu Cooperative Milk Producers Federation, whose popular brand is Aavin.
Tamil Nadu Milk Producers Welfare Association president M.G. Rajendran welcomed the move and said that it would get Aavin new consumers. “The government should subsidise this amount as otherwise the milk cooperative would suffer losses,” he said.
Aavin can tide over the financial burden by tightening its purse strings and by improving its marketing network, a former official said. “It spends around ₹1 crore a month giving 75 paise a litre to ten C and F agents with a promise that they will increase sales by 3 lakh litres a day. However, this has not happened. The system of supplying milk through the agents, then wholesale and retailers must be changed,” he said.
A distributor said that the present marketing team and system must be overhauled. “Conversion of milk into milk powder must be reduced. Daily around 4.5 lakh litres are converted and it costs around ₹12 a litre. District unions in Tiruchi, Coimbatore, Kanniyakumari and Tirunelveli do not convert the milk into powder and sell all the milk they procure, which helps them remain profit-making unions,” he said.
Another former official said that focus should be on increasing milk sales to commercial establishments and by setting up more retail outlets. “If availability of milk is improved, more consumers would be attracted to Aavin, especially after the reduction in prices. Distributors who sell other brands of milk too want to take up Aavin sales,” he said.
Procurement price
Aavin clarified that procurement prices of milk would remain the same.
Producers supplying cow’s milk with 4.3% fat and 8.2% solids-non-fat in a litre of cow’s milk would be paid ₹32 per litre and those supplying their respective cooperative societies buffalo’s milk with 7% fat and 8.8% SNF would be paid ₹41 per litre. “These prices have been in effect from August 2019,” said an official.
