Priyanka Shaw
Chennai, 23 August
Milk supplied by Tamil Nadu Milk Cooperation Federation under the brand name, Aavin will get costlier after the National Green Tribunal’s (NGT) order to use biodegradable packaging.
In response to NGT’s order to change the packaging, S Vineeth, Managing Director of Aavin said they are welcoming private players and are ready for solutions.
Sameer Gupta, an analyst from IIFL Securities Limited who tracks Heritage Stadium, the third largest milk seller in the state, confirmed that Aavin milk prices are expected to increase by 10- 15%. At present, one litre of toned milk which is priced at Rs 40 may cost dearer. This assumes significance as the NGT in a judgement ordered Aavin to involve private companies to help them make a switch from plastic to eco-friendly packaging. The biodegradable packing will hike milk prices, as Aavin had previously used recycled plastic.
Aavin has a market share of more than 50 % in the state. It is the largest dairy cooperative of Tamil Nadu which makes Rs 6 crore in sales daily and sells 30 lakh litres of milk all around the state. Milk customers had mixed opinions about the price hike. Samuel, 40, a customer from Besant Nagar said that the government should take up the cost of eco-friendly pack aging instead of making customers pay for it. The Bottomline spoke to five other customers, who saw the change as a step towards sustainability and had no problem with the price hike.
Aavin has 3 packaging units in Ambattur, Madhavaram and Sholinganallur which will make it easier for the company in transitioning of packaging. “If one milk manufacturer can do it, then surely other milk manufacturers can do it” said Gupta, on the implementation of eco-friendly packaging on the whole dairy industry.
Emails sent to the official spokesperson of Hatsun Agro Product Limited, largest private dairy company in Tamil Nadu did not elicit a response. The dairy industry in Tamil Nadu was valued at Rs 1,218.9 bn in 2023 according to a report titled “Diary Industry in Tamil Nadu” published by the IMARC group, a market research company. The market is expected to grow at a CAGR of 13.3% during 2024-2032.