TN milk cooperative ‘Aavin’ yet to pass on GST benefit as rivals slash prices

Chennai, Sep 22
Consumers in Tamil Nadu may have to wait longer for cheaper ghee, butter, paneer and other dairy products, as state-run Aavin has not revised its rates even after the Goods and Services Tax (GST) on such items was cut from 12 per cent to 5 per cent.

While Amul, Karnataka’s Nandini, Kerala’s Milma and several private brands have reduced prices with effect from Monday, Aavin outlets continued to sell at existing tags.

Amul and Nandini, along with Milma and other private dairies, have lowered prices of ghee, paneer, butter, ice cream, chocolates and other products by Rs 25 to Rs 40. A litre of ghee, for instance, now retails at Rs 610 compared with Rs 650 earlier. Amul has extended the cuts across more than 700 products, while Nandini has applied them to about 15 items. Milma has also reduced the prices of 100 items from Monday.

By contrast, outlets in Ambattur, Anna Nagar, Adyar, Korattur and Thiruvanmiyur of Tamil Nadu milk cooperative, Aavin, said no directive had reached them to slash prices.

Officials from the Tamil Nadu Cooperative Milk Producers Federation (TNCMPF), which markets Aavin, said that because its prices are calculated inclusive of GST, a formal state order is required before any reduction can be implemented.

As of late Sunday night, no such instruction had been issued. The absence of relief has disappointed Aavin’s customers ahead of the festival season.

“When private brands reduce ghee and butter prices by Rs 20 - Rs 30 per kg, it is unfair for Aavin to sell at higher rates,” said a resident of Ambattur. Instead of a cut, the GST adjustment has effectively raised Aavin’s base price to keep the maximum retail price unchanged, meaning consumers are paying slightly more.

Franchise owners also admitted this situation had put them at a disadvantage compared to private competitors.

Aavin procures around 35 lakh litres of milk every day, of which 8-9 lakh litres are converted into value-added products. Its annual product sales total about Rs 600 crore, with festive periods contributing heavily -- during last year’s Deepavali season alone, sales touched Rs 126 crore.

With GST reductions already in place nationwide, the state government’s decision in the coming days will determine whether Aavin aligns its prices with other major cooperatives.