Aavin Proposes Milk Price Hike Amid Rising Operational Costs in Tamil Nadu
Aavin has proposed a ₹5 per liter increase in milk prices, pending government approval, to address rising operational costs.
Chennai, November 2 (Daily Kiran) : Aavin, the cooperative milk supplier in Tamil Nadu, has proposed a ₹5 per liter increase in retail milk prices. The organization cites rising operational costs and financial challenges faced by milk sale operators as key reasons for this necessary adjustment. However, this increase will only take effect if approved by the state government.
According to Aavin sources, out of the proposed increase, ₹4 will go to the cooperative society, while ₹1 is earmarked for the milk outlet operators. This move aims to make their businesses more financially sustainable.
Aavin purchases approximately 3.5 million liters of milk daily, with Chennai alone accounting for about 1.5 million liters of that sales volume. The relatively lower prices of Aavin milk have made it popular among both domestic consumers and commercial establishments.
Currently, a 500-milliliter orange packet of milk is priced at ₹30, while the green and purple packets are sold for ₹24 each. The blue packet costs ₹20.
Milk vendors report that they receive only ₹0.75 as commission per packet, which is insufficient to cover expenses like electricity bills and rent. Many vendors are struggling to maintain their businesses despite consistent demand.
Sources indicate that financial pressures have led to the closure of several newly opened Aavin outlets within months. This is why the proposed price hike includes provisions for additional support for vendors.
The widening price gap between Aavin and private brands has also increased demand from commercial clients. Reports suggest that private companies are selling milk for over ₹75 per liter. Consequently, hotels, tea shops, and sweet vendors are purchasing Aavin milk in bulk, sometimes affecting availability for domestic consumers.
Aavin emphasizes that the pressure of low selling prices impacts farmers, the cooperative society, and retailers alike. Recent increases in milk procurement prices by the government have provided some relief to farmers, but addressing the financial challenges faced by the cooperative and its distribution network remains crucial.
The company also noted that neighboring Karnataka recently raised milk prices by up to ₹8 per liter, while the proposed increase for Tamil Nadu is lower.
For now, the ₹5 per liter increase is merely a proposal and will remain under government consideration until approval is granted.
