News Tamil Nadu

Aavin’s Green Magic Plus: A Stealthy Price Hike Disguised As New Variant? TN Milk Dealers Labourers Welfare Association Head Reveals

October 18, 2024
The Commune

The Tamil Nadu Cooperative Milk Producers’ Federation Limited (Aavin) has come under intense scrutiny following its latest move to introduce a new milk variant, Green Magic Plus. The rebranding appears to be a veiled attempt to hike prices, with the newly packaged 450 ml Green Magic Plus priced at ₹25, translating to approximately ₹50 per 900 ml. This marks a significant increase from the existing Green Magic, which is sold at ₹44 per litre. The reduced pack size and increased price have raised questions about Aavin’s pricing strategies and its commitment to providing affordable milk to the public.

Same Nutritional Value, Higher Price

The introduction of Green Magic Plus, which is set to be fortified with vitamins A and D, raises the question of whether the added fortification truly justifies the price hike. The original Green Magic already offers a 4.5% fat content and 9% Solids-Not-Fat (SNF), and the newly announced variant maintains the same nutritional values. The only substantial change appears to be the packaging size reduction and the 11-rupee increase per litre. The fortification of vitamins, while potentially beneficial, seems more like a marketing ploy than a significant upgrade in product quality.

An Attempt To Minimize Losses?

Aavin has acknowledged that it incurs a loss of ₹4 to ₹5 per litre on the Green Magic variant, which is sold at highly subsidized rates. With private milk brands in the market priced between ₹54 and ₹58 per litre, Aavin’s strategy may be to close the gap to reduce financial losses. While the Federation has to contend with higher production costs due to subsidies, critics argue that burdening consumers with a higher price and smaller volume is not a fair solution.

Deceptive Packaging Tactics

The rebranding of Green Magic to Green Magic Plus echoes a familiar pattern of reducing product quantities while simultaneously increasing prices. The tactic of repackaging a 500 ml product into a 450 ml pack, while increasing the price, is seen by many as a “backdoor price increase.” Such practices are not uncommon in the private sector, but when a cooperative like Aavin resorts to these strategies, it raises concerns about transparency and fairness toward consumers.

Criticism From Milk Dealers

The TN Milk Dealers Labourers Welfare Association president, S. A. Ponnusamy, did not mince words, calling the rebranding a “backdoor price increase.” He further accused Aavin of adopting the practices of private firms, such as reducing supply and pushing costlier alternatives onto consumers. For instance, since 2023, the supply of Green Magic has been restricted, compelling dealers to sell Delite, which has a lower fat content (3.5%) but costs the same ₹44 per litre. This shift suggests that Aavin has been steadily moving towards higher profit margins at the expense of the consumer.

High Production Costs: A Factor, But Not An Excuse

Aavin’s higher production costs are partly attributed to the necessity of meeting Food Safety and Standards Authority of India (FSSAI) requirements. The Federation incurs expenses to either buy butter or use its own to meet the required fat content standards, pushing the production cost up to ₹49-₹51 per litre. However, the decision to shift these costs onto consumers through smaller packaging and higher prices feels like a direct contradiction to the cooperative’s mission of offering affordable dairy products.

Consumer Trust at Risk

The controversy surrounding Green Magic Plus comes at a time when there is already high demand for Green Magic in Chennai. In November 2023, Aavin had considered discontinuing Green Magic, only to withdraw the plan after facing backlash. Such instances highlight a pattern of inconsistent decisions that risk eroding consumer trust. Aavin’s lack of transparent communication and the seemingly covert approach to price adjustments might alienate long-time customers who have supported the cooperative for decades.

Previous Product Price Hikes

This is not the first time that Aavin has been hiking the prices of its products. In 2023, just as the festive season was kicking, Aavin increased the prices of its ghee and butter products. The price of 5-litre Aavin Green Magic milk packets were also hiked by ₹10 in 2023.

The quality of the milk also seemed to have deteriorated – worms were found in purple milk packets in Thoothukudi and in orange milk packets in Nilgiris.

Aavin’s introduction of Green Magic Plus seems less about offering a new product and more about disguising a price increase. By maintaining the same nutritional content, reducing the pack size, and raising the price, the Federation is effectively passing on its operational costs to consumers. For a cooperative founded on principles of fair pricing and public service, this approach appears to be a step in the wrong direction.

(With inputs from TNIE)

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