CHENNAI: The state-owned Aavin has reduced the supply of its popular standardised Green Magic milk by nearly 60%-70% in Chennai and several other parts of Tamil Nadu, triggering shortage and forcing consumers to switch to costlier private brands.
Industry sources attributed the decline to seasonal drop in milk procurement of around 3-4 lakh litres a day during summer, coupled with mounting losses incurred by Aavin due to the heavily subsidised pricing of the product.
According to sources, Green Magic milk, which contains 4.5% fat and 8.5% solids-not-fat (SNF), accounts for nearly 7.5 lakh litres of the 14 lakh litres of milk supplied daily in Chennai.
But over the past few days, its distribution has reportedly been reduced to around 2.5 lakh litres. Aavin officials, however, maintained that the reduction is only around
10%-15% and described it as a temporary measure necessitated by lower milk procurement during summer. They said there is no decision to permanently curtail the supply of the milk variant and assured that normal distribution would resume soon. Aavin Managing Director Ajay Yadav could not be reached for comment.
Aavin sells Green Magic milk at Rs 44 per litre despite production costs averaging Rs 48-Rs 49 per litre during peak procurement seasons and rising to Rs 49-Rs 51 per litre in summer. This results in a loss of around Rs 4-Rs 5 on every litre sold. Comparable standardised milk variants sold by private dairy brands are priced between Rs 64 and Rs 68 per litre.
Sources said Aavin’s expenditure has risen significantly over the years as the fat content in the milk it procures is lower than the ones sourced by several private dairies.
To meet the fat levels prescribed by the Food Safety and Standards Authority of India (FSSAI) and manufacture value-added milk products, the cooperative spends between Rs 65 crore and Rs 75 crore every month for purchasing butter for milk reconstitution.
Under FSSAI norms, toned milk must contain 3% fat, standardised milk 4.5% fat, and full-cream milk must have 6% fat. In November 2023 and again in 2024, Aavin explored replacing Green Magic milk with its velvet packet Delite variant which contains 3.5% fat to reduce losses by 10-15%.
Following the proposal, allocations of Green Magic milk were gradually reduced while supply of Delite milk was increased. However, the cooperative later stepped up Green Magic distribution in response to consumer demand.
Milk dealers and retailers told TNIE that supplies had been sharply curtailed since Monday. Several retailers said they were receiving only 25 litres of Green Magic milk against their usual allocation of 100 litres, while larger dealers reported receiving about 1,000 litres instead of 3,000 litres.
A retailer in North Chennai said, “Five out of every 10 customers prefer only the Green Magic variant. Unlike toned milk, the supply of Green Magic has never been consistent. Earlier, supplies would dip for a day or two, but this time the quantity has been cut by nearly 70%-75% for several days. As a result, I have been forced to increase orders for private milk brands.”
S Mariya Selvam, a resident of Korattur, said, “I used to buy a 500 ml packet of Aavin Green Magic for Rs 23. For the past few days, I have been purchasing milk from a private brand at Rs 34. This will increase my monthly expenses by around Rs 330. The shop owner told me he received only five packets instead of the usual 25.”
An Aavin official reiterated that supply disruption is only temporary and normalcy will be restored soon.
