Aavin proposes Rs 5 per litre milk price hike, awaits govt approval

Chennai: Tamil Nadu’s cooperative milk supplier Aavin has recommended increasing its retail milk prices by Rs 5 per litre, citing financial pressure on its operations and difficulties faced by milk outlet operators.

The proposed revision will take effect only if the State government approves it. According to Aavin sources, Rs 4 from the proposed increase would go to the cooperative, while the remaining Re 1 would benefit outlet operators.

The recommendation seeks to improve their financial viability amid rising operating expenses. Aavin procures around 35 lakh litres of milk daily, while sales in Chennai alone account for approximately 15 lakh litres.

Its relatively affordable prices make it an important supplier to households and commercial establishments. Currently, a 500 ml orange milk packet costs Rs 30, while green and purple packets of the same quantity are priced at Rs 24. The blue packet sells for Rs 20.

Outlet operators receive a commission of just 75 paise per packet, which they say is inadequate to meet electricity charges, shop rents and other expenses.

Many struggle to sustain their businesses despite steady demand for Aavin milk. Sources said the financial difficulties have resulted in newly opened outlets shutting down within months, a pattern reported across several districts.

The proposed increase includes a component intended to support these retailers and help them continue operating.

The price difference between Aavin and private brands has also increased demand from commercial buyers. Private companies sell milk at more than Rs 75 per litre, according to the sources.

Hotels, tea shops and sweet shops consequently purchase substantial quantities of Aavin milk, sometimes leaving retail outlets without sufficient supplies for household consumers.

Explaining the recommendation, Aavin sources said low selling prices had placed pressure on farmers, the cooperative and outlet operators.

The government’s recent increase in milk procurement prices had provided relief to farmers, they said.

However, the financial concerns of the cooperative and its retail network still needed to be addressed. The proposed retail price revision was therefore submitted for government consideration.

The sources also cited Karnataka’s recent milk price increases of up to Rs 8 per litre, saying the revision recommended for Tamil Nadu was lower.

For now, the Rs 5 increase remains a proposal, with implementation dependent on the government’s decision. Existing retail prices continue to apply pending approval.

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