A dispute between Aavin’s wholesalers and dealers in Tamil Nadu, India, over commission hikes may impact milk supply in Chennai. Officials plan to resolve the issue.
A dispute between wholesalers and dealers of Aavin, a state-owned dairy cooperative under the Tamil Nadu Cooperative Milk Producers’ Federation, has raised concerns about a potential disruption in milk supply in the city. The disagreement stems from demands for an increase in commission, with wholesalers seeking an additional ₹3 per tub (12 liters of milk) and threatening to halt supply if their demands are not met.
Currently, wholesalers receive ₹14.40 per tub, while dealers—who collect milk from wholesalers and deliver it to retailers—earn ₹18 per tub. A dealer expressed concerns over the low margins, stating, “The commission hardly covers the time and fuel costs required for early morning deliveries. Many retailers prefer Aavin, which is why we continue working with the brand.”
A few wholesalers mentioned that they were earning an additional ₹1 per packet from selling Aavin’s fortified milk brand, Green Plus, though this variant has yet to be introduced in Chennai. Experts in the dairy industry believe Aavin should expand its milk procurement and sales to match cooperative models in other Indian states.
If dealers and wholesalers receive higher margins and increased milk supply, retailers will refrain from selling above the Maximum Retail Price (MRP), and dairy farmers will also benefit from better payments.”
Industry Expert
S.A. Ponnusamy, president of the Tamil Nadu Milk Dealers’ Employees Welfare Association, urged the wholesalers to address their concerns through official channels rather than disrupting supply.
Dealers operate with minimal margins and cannot simply halt distribution. If there are issues with commissions, wholesalers should approach Aavin officials. We expect Aavin to intervene, hold discussions, and resolve the matter. This would also be an appropriate time to consider a long-pending demand to increase dealer margins,”
S.A. Ponnusamy,
Aavin officials assured that steps would be taken to maintain a steady milk supply while addressing the concerns regarding commission adjustments. The state-run cooperative plays a crucial role in Tamil Nadu’s dairy sector, supplying milk to millions of households daily.
