CHENNAI: Even as leading public sector dairy cooperatives Amul and Karnataka Milk Federation’s Nandini have announced price cuts following the GST reduction on dairy products from 12% to 5%, milk products from Tamil Nadu’s Aavin — the country’s third-largest public sector dairy federation — will continue to be sold at existing prices on Monday, when the revised GST will come into force.
Amul, Nandini and a few private brands have reduced the prices of ghee, paneer, butter, ice cream, milk chocolates and other products by Rs 25 to Rs 40, owing to the GST cut. However, senior officials from the TN Cooperative Milk Producers Federation (TNCMPF), which owns the Aavin brand, said that since Aavin calculates its final prices inclusive of GST, a formal directive from the state is necessary before revising rates. As of 11 pm on Sunday, no such directive was issued.
As a result, during the upcoming festive season, consumers in Tamil Nadu may not enjoy the price relief that buyers in Karnataka and other parts of the country will receive.
‘No instruction issued to bring down prices’
“With GST reduced, Aavin has had to adjust the base price upward to keep the maximum retail price unchanged. Effectively, this amounts to an increase in Aavin product prices from Monday,” said the proprietor of a franchise retail outlet.
When TNIE visited the Aavin outlets in Ambattur, Anna Nagar, Adyar, Korattur and Thiruvanmiyur in Chennai on Sunday, the staff said no instructions had been issued to lower product prices. “So far, we haven’t received any order to reduce prices of ghee or butter,” said an employee at the Ambattur outlet.
Aavin procures about 35 lakh litres of milk daily, of which 8-9 lakh litres are converted into value-added products. The revised GST rates take effect from Monday, with Amul and Nandini cutting the per litre price of ghee from Rs 650 to Rs 610 along with reductions across other items. Compared to Nandini (about 15 products), Amul has slashed prices across more than 700 dairy products.
A section of Aavin customers demanded that the 7% GST reduction be reflected in consumer prices. S Rajesh, a resident of Mullai Nagar, Ambattur, said, “When private brands cut ghee and butter prices by Rs 20-Rs 30 per kg, it’s unfair for Aavin to continue selling at higher prices. With demand rising during festivals, Aavin should reduce prices too.”
Aavin generates annual milk product sales worth about Rs 600 crore. During last year’s Deepavali season, the Aavin recorded sales of Rs 126 crore.