The Hindu Business Line : Amul-Mother Dairy tussle set to intensify

THE ongoing tussle between Amul and the National Dairy Development Board (NDDB) over the latter's move to establish joint venture marketing companies with State-level dairy federations is set to intensify, with the Institute of Rural Management at Anand (IRMA) slated to hold a two-day open session beginning January 16 to `debate' the issue.

"We have invited the chairmen of the various federations as well as secretaries of the concerned State animal husbandry & dairying departments to freely express their views on the subject. I have personally requested the NDDB Chairman, Dr Amrita Patel, to attend the seminar," the Chairman of Amul (Gujarat Co-operative Milk Marketing Federation), Dr Verghese Kurien — who is also Chairman of IRMA — told Business Line.

He, however, admitted that Dr Patel had not yet confirmed her participation in the session. "I hope NDDB would be suitably represented and we get an opportunity to hear their point of view," he said.

According to him, IRMA will provide the right platform to discuss threadbare the issues involved in the creation of marketing joint ventures, in which the NDDB would hold the dominant 51 per cent stake (through its wholly-owned subsidiary, Mother Dairy Foods Ltd) and the individual State federations the remaining 49 per cent.

"I agree that there has been a lot of mudslinging between Amul and NDDB over the issue, which is unfortunate especially when we know that our multinational and private sector rivals are watching from the sidelines. But that does not mean we should not debate the issue. And, it is precisely for this that we are calling all the stakeholders involved in the co-operative dairy movement," he added.

Dr Kurien said that the issue needed to be openly debated by all parties concerned because NDDB was ultimately a statutory corporation of the Government and not a co-operative. If the State federations in Kerala (Milma) or Tamil Nadu (Aavin) were to surrender their marketing functions along with transfer of brands to the venture, the co-operative dairy sector will effectively be handed over to the Government, which, in turn, would be keen to privatise these entities in the long run.

"NDDB may claim that the joint ventures are going to be pure marketing ventures and the functions of procurement, processing and packaging of milk will continue to remain with the co-operative dairy unions and primary societies. But we all know that it is in marketing and brand creation that the real cream lies. Britannia, after all, does not manufacture the dairy products that it markets in its brand name," he quipped.

He was also sceptical about the joint venture route helping co-operatives to market their milk and milk products better. "What expertise does NDDB have in marketing?

Marketing is not just a matter of hiring people from Hindustan Lever and paying them fancy salaries.

Ultimately, the federations will have to develop a niche for their own brands, just as Amul has done over the years. In fact, we are willing to co-operate with any union or federation that is interested in using our brand and marketing network," he said.

NDDB chief says `no' for IRMA meet

THE National Dairy Development Board (NDDB) has ruled out participating in the Institute of Rural Management Anand's (IRMA) proposed open session on its policy of setting up marketing joint venture companies with State dairy federations.

"It is most unfortunate that IRMA is planning to hold a workshop on an issue on which it has very little first-hand information. After all, this is a matter that primarily concerns NDDB and the co-operative dairies funded by it and not something that is of direct academic interest," the NDDB Chairman, Dr Amrita Patel, told Business Line.

Dr Patel said that if the institute were really keen to hold a workshop on the desirability of the joint venture route, the right approach would have been to, first of all, have an in-house discussion between the NDDB top brass and senior faculty members of IRMA.

This would have led to the drafting of a background paper giving details of what NDDB's joint venture policy precisely entailed, which, in turn, could be the basis for an informed open session debate involving all concerned stakeholders.

NDDB officials said that if Dr Kurien felt that the joint venture issue was serious enough to merit the holding of a national workshop at IRMA, he should not have gone to the press in the first place. Instead, "he ought to have first clarified matters with us." Moreover, an institute of IRMA's standing should not be unnecessarily dragged into a controversy, which would ultimately impinge on its academic credibility.

However, those in favour of a debate pointed out that IRMA was established mainly with a view to producing management professionals who would man co-operative dairies and other such ventures across the country.

It is for this reason that only co-operative organisations are allowed to conduct direct campus recruitment and this placement window is not open for private companies, even if they are engaged in food processing or other rural-based industrial activity.

"It is only fair that a policy that can have a far-reaching impact on the future business of co-operative dairies should be debated within the academia and IRMA provides the right platform for this. Why is NDDB shying away from a debate?'' they quipped.

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