Arokya’s full cream milk price cut by Rs 3 per litre, Aavin still cheapest

Sources attribute price cut to drop in sales and increased milk production due to summer rains
Consumption of dairy products has substantially decreased across TN, forcing companies to cut prices, said an official from the milk producers union
Consumption of dairy products has substantially decreased across TN, forcing companies to cut prices, said an official from the milk producers union file pic

CHENNAI: Tamil Nadu’s leading dairy brand, Arokya, has slashed the price of full cream milk by Rs 3 per litre, primarily benefiting tea shops and hotels. Additionally, the price of curd has also been lowered by Rs 6 per kilogram. However, state-owned Aavin still provides the cheapest dairy options in the country compared to private brands and dairy giants like Amul.

After the price revision, Arokya’s full cream milk (FMC) is now priced at Rs 65 per litre, while the Aavin equivalent with 6% fat is priced at Rs 60. Aavin milk cardholders receive FCM at Rs 48 per litre. Moreover, Amul’s FCM is priced at Rs 64 per litre, and another major player, Nandhini, does not offer full cream milk.

Industry sources attribute the price cut to a drop in sales and increased milk production due to summer rains, prompting private companies to reduce the milk procurement price by Rs 4-5 per litre.

“The consumption of dairy products such as lassi, curd, buttermilk, and other items has substantially decreased across the state, forcing companies to cut prices,” said an official from the milk producers union.

Hatsun Agro Products, the company that owns the Arokya brand, initially reduced prices by Rs 2 per litre on June 17 and implemented an additional cut of Rs 1 on Monday, according to the official price list. Similarly, the price of two-litre milk packets has been reduced from Rs 134 to Rs 128, and the 500-gram curd pouch price has dropped from Rs 40 to Rs 37. In comparison, Aavin’s 500-gram curd pouch costs Rs 35.

The decline in milk demand has also reduced competition in the dairy industry, resulting in an increased supply of milk to Aavin, added the official.

The state’s per day milk demand stands at 2.2 crore litre. Aavin holds a market share of about 17-18% in the dairy industry, while six to eight private brands account for about 80 to 82%. Among these, Arokya has the largest share of milk and milk products in the state.

Currently, Aavin suppliers operate under a procurement price of Rs 35 per litre for cow milk and Rs 44 for buffalo milk, with an additional Rs 3 per litre incentive since December 2023. In contrast, private companies offer a procurement price of Rs 43-46 per litre for cow milk and Rs 50-52 for buffalo milk, which is used for making Palkova and other milk products.

Aavin’s milk procurement, which fell by five lakh litres a day between February-April 2024, surged from 27-28 lakh litres to 32 lakh litres in June, stated an official from Aavin.

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