KOCHI: The Kerala Co-operative Milk Marketing Federation (Milma) has approached national and central authorities over the Karnataka Milk Federation’s (KMF) expansion of its Nandini milk retail operations in Kerala, raising concerns over cross-border competition between state dairy cooperatives.
Milma has reportedly submitted representations to the National Cooperative Dairy Federation of India (NCDFI) and central agricultural authorities, seeking intervention over KMF’s establishment of retail kiosks and milk distribution channels in Kerala.
Nandini Expands Retail Presence
KMF has established Nandini retail outlets and fluid-milk distribution channels in locations including Kochi, Manjeri and Tirur.
Milma and Kerala dairy authorities have raised concerns about the expansion, arguing that permanent retail sales by another state’s cooperative federation could affect Kerala’s local dairy cooperative network and milk producers.
The issue marks a shift from the more limited inter-state movement of milk that has traditionally taken place between state dairy cooperatives.
Pricing Difference at Centre of Dispute
A key issue raised by Milma is the difference in production economics and government support between the two states.
According to Milma’s position, Karnataka’s milk producers receive production incentives and other forms of government support, which the federation says can allow Nandini milk to enter Kerala at prices below those of Milma’s pasteurised milk.
Milma argues that this creates competitive pressure for Kerala’s cooperative system, which it says operates with higher procurement and operating costs while supporting a large base of small dairy farmers.
The extent to which subsidies and other cost differences translate into a retail-price advantage would depend on the applicable support mechanisms, procurement costs, logistics and pricing structures of the two federations.
From Seasonal Supply to Retail Competition
Inter-state milk movement between cooperative federations has historically included bulk supplies during periods of local shortages, particularly during festive seasons or seasonal declines in milk availability.
Milma itself has procured bulk milk from KMF and Tamil Nadu Cooperative Milk Producers’ Federation (Aavin) during periods of supply pressure, including around Kerala’s Onam season.
The current disagreement stems from KMF’s move towards regular retail distribution aimed at individual consumers, rather than limited institutional or shortage-related supplies.
Milma has argued that the expansion is inconsistent with the cooperative arrangements and reciprocal practices that have historically governed relations between state-level dairy federations.
Competition Expands Beyond Traditional Markets
The dispute highlights a broader development in India’s cooperative dairy sector, where state federations are increasingly looking beyond their traditional geographic markets as milk procurement and processing capacities expand.
For dairy cooperatives, selling outside their home state can provide access to new consumers and markets, while host-state cooperatives may view sustained external retail competition differently because of their responsibility to procure milk from local producers.
In Kerala, the expansion of Nandini retail outlets has therefore brought market expansion, milk pricing, farmer procurement and cooperative competition into direct focus.
The outcome of the representations made by Milma to national and central authorities could have implications for how state dairy cooperatives approach cross-border retail sales and competition in other milk-deficit markets.
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