Tamil Nadu Private Dairies Seek Fair Competition After Aavin Price Hikes

The Tamil Nadu Dairies Association has urged Chief Minister C. Joseph Vijay to reconsider the subsidy structure extended to Aavin and ensure a level playing field for private dairy companies. In a representation to the Chief Minister, the association said successive increases in Aavin’s milk procurement prices could intensify financial pressure on private dairies and the farmers supplying them.

The association said private dairy companies have played a significant role in developing Tamil Nadu’s dairy sector over the past three decades. It claimed that private operators handle around 75% of milk procurement and sales in the State, but do not receive comparable government subsidies.

Aavin’s cow-milk procurement price was increased from ₹38 to ₹41 per litre on August 19 and subsequently to ₹44 per litre on August 31. The government cited rising fodder and other input costs for the revisions, with the latest increase expected to cost the State an additional ₹60 crore per month.

According to the association, private dairies without equivalent subsidies are being forced to raise procurement prices to retain milk producers and pass on additional costs to consumers. It also said private companies were already paying higher rates than Aavin in several parts of Tamil Nadu to secure milk supplies.

The association has asked the government to reconsider consumer subsidies and allow retail milk prices to reflect procurement costs while protecting farmers dependent on private dairies. It also suggested studying the Gujarat-based Amul cooperative model, where a share of profits is distributed to milk producers.

The representation highlights the ongoing debate over procurement costs, subsidy structures and competition between cooperative and private dairy operators in Tamil Nadu. The association has called for measures that support both private dairies and their milk producers, with the broader objective of maintaining a sustainable and competitive dairy sector.

Source: Dairynews7x7 16 Sep, 2026 Read full story here

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