Proposed revision would allocate ₹4 per litre to the cooperative and ₹1 to retail outlet operators amid rising operating costs and pressure on the distribution network.
CHENNAI: Tamil Nadu’s state-run dairy cooperative, Aavin, has proposed a ₹5 per litre increase in retail milk prices, citing financial pressure on its operations and the difficulties faced by milk outlet operators. The proposal has been submitted to the State Government, and its implementation will depend on official approval.
According to Aavin sources, the proposed increase would be divided between the cooperative and its retail network. Of the additional ₹5 per litre, ₹4 would go to the cooperative, while ₹1 would be allocated to outlet operators.
The recommendation is intended to improve the financial sustainability of Aavin’s distribution network amid rising operating expenses.
Retail outlet operators seek better margins
Aavin outlet operators reportedly receive a commission of just 75 paise per packet, which they say is insufficient to cover expenses such as electricity, shop rent and other operating costs.
Sources indicated that financial difficulties have forced some newly opened outlets to shut down within months of starting operations. Similar concerns have reportedly emerged in several districts.
Also Read: Goa Dairy Keeps Milk Prices Unchanged Despite Karnataka’s ₹8 Per Litre Nandini Price Hike
The proposed ₹1 per litre allocation for retailers is intended to improve their earnings and help sustain the network of Aavin milk outlets.
Aavin’s procurement and Chennai sales
Aavin reportedly procures approximately 35 lakh litres of milk daily, while its sales in Chennai alone account for around 15 lakh litres per day.
Its relatively affordable retail prices have made the cooperative an important supplier to both household consumers and commercial establishments, including hotels, tea shops and sweet shops.
The existing prices of Aavin’s 500 ml milk packets are:
| Variant | Current price (500 ml) | Equivalent price per litre |
|---|---|---|
| Orange packet | ₹30 | ₹60 |
| Green packet | ₹24 | ₹48 |
| Purple packet | ₹24 | ₹48 |
| Blue packet | ₹20 | ₹40 |
The proposed ₹5 per litre increase would raise the blue packet’s equivalent price from ₹40 to ₹45 per litre, if approved. The final revised prices of individual variants would depend on the government’s decision and Aavin’s official pricing notification.
Commercial demand adds pressure to retail availability
Aavin’s lower prices compared with some private dairy brands have reportedly attracted substantial purchases from commercial establishments.
Hotels, tea shops and sweet shops purchase milk in significant quantities, sometimes affecting the availability of packets at retail outlets for household consumers.
According to the sources cited, private dairy brands in the Tamil Nadu market sell milk at prices exceeding ₹75 per litre. This price difference has contributed to Aavin’s appeal among bulk buyers.
The situation highlights the challenge of balancing affordable milk prices for consumers with the financial viability of cooperative retail operations.
Cooperative cites financial pressure despite procurement price revision
Aavin sources said that low selling prices had placed pressure on different parts of the cooperative’s operations, including the interests of milk producers, the organisation and retail outlet operators.
The recent increase in milk procurement prices had provided relief to farmers. However, the cooperative’s operational and distribution-related financial concerns remain under consideration.
The proposed retail revision is therefore intended to address some of these pressures while supporting the retail network.
Karnataka price revision cited as a comparison
Aavin sources also referred to Karnataka’s recent milk price increases of up to ₹8 per litre, suggesting that the proposed ₹5 revision in Tamil Nadu is comparatively lower.
However, milk prices across states vary according to product categories, fat content, procurement arrangements, subsidies and retail pricing structures. A direct comparison therefore needs to consider the specific milk variants and pricing components involved.
Government approval remains pending
For now, Aavin’s proposed ₹5 per litre increase remains under consideration. Existing retail prices will continue to apply until the Tamil Nadu Government takes a decision and the cooperative issues an official notification.
Liquid milk retail price comparison
| Milk category | Price per litre |
|---|---|
| Aavin toned milk – Blue (current) | ₹40 |
| Aavin toned milk – Blue (proposed) | ₹45 |
| Nandini toned milk – Karnataka (revised Nov. 1) | ₹54 |
| Private dairy brands – Tamil Nadu market | ₹75+ |
Reported retail prices in ₹ per litre. The Aavin proposed price is not yet approved.
Key takeaway: If approved, the proposed increase would take Aavin blue-pack toned milk from ₹40 to ₹45 per litre. This would remain below the cited Nandini toned milk price of ₹54 per litre and the reported private-brand benchmark of more than ₹75 per litre.
Note: The ₹45 Aavin price is proposed, not approved. The private-brand figure is an indicative market benchmark; prices may vary by brand and milk category.
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