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Mother Dairy to take on Amul milk in Gujarat
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Saturday, 05 January, 2008, 08 : 00 AM [IST]
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By A Correspondent, Ahmedabad
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Mother Dairy brand will enter the Rs 600 crore annual Ahmedabad milk market in January in what will be a head-on clash with incumbent Amul from the Gujarat Cooperative Milk Marketing Federation (GCMMF).
Both GCMMF and NDDB have been fighting over the Mother Dairy brand with the former contending that Mother Dairy is merely a concept while the latter claims ownership of the brand.
NDDB got Mother Dairy registered in New Delhi while the federation's Mother Dairy brand is registered in Gandhinagar, capital of Gujarat.
According to Paul Thachil, chief executive officer, Mother Dairy India Ltd, the company's Sugam brand, sold as milk pouches in Saurashtra and Ahmedabad, will now be replaced by Mother Dairy.
Mother Dairy India is a subsidiary of NDDB, an entity created to promote, finance and support producer-owned and controlled organisations in the cooperative sector and strengthen farmer and dairy cooperatives. It has 117,575 village cooperatives under its fold and procures more than 21.5 million litres of milk from across the country daily. This will be the first Mother Dairy milk offering in Gujarat where it sells butter, cheese and ghee in Saurashtra, Ahmedabad, Anand and Baroda.
Amul controls more than 85% of the organised milk market of Ahmedabad, selling 600,000-650,000 litres of milk every day. It is followed by the Ahmedabad District Cooperative Milk Producers Union Ltd -owned Uttam brand. Uttam sells around 75,000 litres of milk per day in Ahmedabad.
Other private sector players include Gayatri, Shresth, Anmol and Gamdiwala.
"Mother dairy is basically a concept and if any of the cooperative member dairies have surplus milk, then it is sent to mother dairy. These mother dairies were set up to help rural hinterland milk cooperatives and this is how mother dairy of Delhi, Chennai, Hyderabad, Kolkata, one near Ahmedabad and others have come up across India. All the mother dairies, except the one in Delhi, were transferred to respective cooperatives across the country," notes a senior official in GCMMF.
Indeed, the Mother Dairy at Koba, near Ahmedabad, is owned by the federation.
Both sides were in a protracted legal battle though, after the exit of Verghese Kurien from the cooperative sector, both the board and GCMMF have kept a low profile on this issue. When Kurien was at the helm of GCMMF, he opposed selling of dairy products under the Mother Dairy brand and resisted any competition between these two brands as he thought it would hurt the interests of farmers and milk producers.
NDDB and its chairperson Amrita Patel, a former protege of Kurien, however, were of the opinion that cooperatives must compete like any other professional bodies. However, Kurien was later eased out in 2006 by dairy members of GCMMF with what was seen as tacit support of Patel. After Kurien's exit from GCMMF, its relations with NDDB have improved and officials of both the entities are no longer willing to talk about the legal status of the brand.
Thachil insists that Mother Dairy will try to increase its share through marketing and distribution and not target any specific brand. "The objective is to leverage the Mother Dairy brand equity," he says.
GCMMF officials, however, say the arrival of NDDB's Mother Dairy will create confusion in the minds of customers in Ahmedabad as Mother Dairy Gandhinagar is owned by GCMMF and is widely known in the region.
"It would create a confusion but we will deal with the situation," says a senior GCMMF official who does not wish to be named, adding that the federation is ready to match NDDB's marketing muscle.
NDDB had led a big marketing push in Ahmedabad for the launch of Sugam brand, advertising heavily in local and outdoor media.
It also tried to lure Amul milk distributors by offering them higher commission.
However, that was quickly matched by Amul and Sugam failed to make any meaningful inroads into Amul's territory.
NDDB buys milk for its Ahmedabad and Saurashtra market from the Junagadh dairy in Saurashtra. It collects at least 100,000 litres every day from milk producers in Junagadh and surrounding districts of Saurashtra.
Mother Dairy products are available throughout India except for a few states such as Tamil Nadu and Kerala. Its product portfolio includes milk, butter, ghee, cheese, flavoured drinks, probiotic yogurt and ice creams.
"We are constantly evaluating market opportunities for various categories and we would certainly be present across most of them across all states of the country over the next few years," predicts Thachil.
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