Milk cooperative accused of undercutting profits in Tamil Nadu

The Tamil Nadu government invests crores of rupees in Aavin to ensure that milk and other dairy products are available to the general public at a lower cost than private companies.

However, according to an audit report for 2019-20, Aavin has provided ghee, butter, and milk powder to personal gamers at a significantly lower price than what is available or what the Nationwide Cooperative Dairy Federation of India (NCDFI), the apex marketing and advertising body for co-operatives, has fixed. Private firms who purchased these dairy products on a wholesale basis eventually repackaged and sold them at a much higher retail price.

In September 2019, the NCDFI set a public sale cost of $300 per kilograms for skimmed milk powder (SMP). Aavin, on the other hand, offered a non-public agency 100 tones at only $248 per kilograms.

Similarly, personal enterprises were supplied ghee for Rs. 310 per kg, but the market price for bulk purchase was over Rs. 400 per kg. According to the audit, Aavin misappropriated crores of rupees on this fad. N Subbaiyan, a former M D of Aavin, defended the deals, claiming that the market value of SMP is always changing and that NCDFI levies aren’t based on market trends.