What is the Amul versus KMF controversy?

amul

Central idea

Amul, the country’s largest dairy player, announced on April 5 that it would supply milk and curd through e-commerce portals in Bengaluru.
The announcement was met with opposition from Kannadigas, who saw it as an attempt to threaten the iconic Nandini milk brand of the Karnataka Milk Federation (KMF).

The Amul vs. KMF row turned into a political tool in poll-bound Karnataka.
Dissenting sections expressed fears that Amul would eat into the market of Nandini and pose a threat to its business in the state.
The ruling government was accused of attempting to privatize the milk sector and “finish off” a home-grown product.

Both Amul Dairy and KMF are successful examples of adopting the three-tiered ‘Anand’ model of dairy procurement.
Farmers supply milk to dairy cooperatives at the village level, which is then procured by milk unions at the district and state levels.
There are 16 district milk unions in Karnataka supplying milk to the dairy cooperatives.
KMF provides competitive prices to dairy farmers.
KMF corners most of the market share for surplus milk provided by farmers in the state.

It is a system of milk collection and distribution pioneered by the Amul cooperative in Anand, Gujarat, India.
This model has revolutionized the dairy industry in India by providing a fair price to dairy farmers, eliminating the need for middlemen, and improving the quality of milk.
Under the Anand model, farmers are organized into dairy cooperatives, which collect and market their milk.
The cooperatives are managed by the farmers themselves and are supported by the infrastructure and marketing expertise of the Amul cooperative.
The farmers are paid a fair price for their milk, which is based on its quality and quantity, and they receive regular payments for their milk.

Overpricing: The pricing difference between Amul’s toned milk and Nandini’s toned milk was highlighted, with Amul’s milk priced at ₹54 per litre and Nandini’s at ₹39 per litre.
Unhealthy competition: KMF’s online presence in the state could create unhealthy competition with Amul’s online presence, despite the pricing difference, according to the federation.

The KMF is the second-largest milk cooperative in India after Amul.
While Amul and KMF compete in neutral regions like Mumbai, Nagpur, Goa, Hyderabad, and Chennai markets, they have not clashed on home turfs.
Karnataka is a milk-excess market that meets the needs of the state and exports surplus to other states.
KMF plans to write to the National Dairy Development Board, requesting it to direct Amul not to venture into the Bengaluru market and concentrate on milk-deficient states.

Amul clarified that it was launching its fresh milk and curd only for a niche market through e-commerce channels and not through the mass market distribution network.