Private dairies milk farmers

BANGALORE: Aggressive marketing by private milk companies, most of whom upstarts, has cut into the market share of the Karnataka Milk Federation, a co-operative, leaving poor farmers in dire straits.
The milk market in Bangalore is churning, and churning furiously if an array of brands — Heritage, Tirumala, Arokya, Swastik, Balaji and Krishna — adorning the shelves of neighbourhood parlour is any indication.
Some of the names are familiar and others not so, but the game plan chalked out by them has more or less the same script: Create a cartel, buffet the agents with a creamy commission and make hay. Sources in the industry said the triad of dealers, shopkeepers and agents dictate the terms and it’s the sellers’ market all the way.
Ever since the private dairies forayed into Bangalore about four years ago, the KMF has been on its toes to keep its business intact. Five years ago, the KMF sold 15.5 lakh litres of milk and curds across the state, which has now dwindled to 15 lakh. In percentage terms, the KMF is steadily losing market.
Conceding that private players are eyeing the urban segment including some big towns in North Karnataka, KMF director H. Channegowda says: "The KMF has had to get market-savvy." And it has.
Brushing aside the challenge posed by upstarts, Nilgiris dairy unit director C. Kumar says: "We’ve a committed clientele.We don’t believe in undercutting." Another key player, Heritage, procures milk from southern Andhra Pradesh districts such as Chittoor and Anantapur at a price relatively lower.
The neophytes have had to get a headstart in the already saturated market by playing out new rules and offered to the agents commissions as high as Re 1 a litre against the KMF’s 30 paise a litre. "This is a temporary phase.
The private operators cannot keep this up for long," says Channegowda. Its upbeat note notwithstanding, the KMF’s constituent unit Bangalore Dairy has been losing its hold over the market with the sale of its flagship brand, Nandini, selling 4.1 lakh of litres now against 5.1 lakh litres four years ago.
The KMF share in the Bangalore pie has plunged 60 per cent in many areas. With upstart dairies throwing the niceties of game to the winds to remain in the fray, the humble shareholders of KMF — farmers, who are often single cow owners — have been left to fend for themselves.