Amul in Catch-22 situation over foreign JVs

The top brass at Indian co-operative dairy heavyweight, Anand-based Gujarat Co-operative Milk Marketing Federation (GCMMF), better known by its iconic brand Amul, has been deliberating over a critical issue in recent times.

Pressure is mounting on the 13-member board to improve profits at the hands of farmers at a time when their input costs (for corn products, cattle-feed and de-oiled cakes) are up by 25-50% in the last one year. The board is mulling over the feasibility of entertaining joint ventures to tap global markets without hurting Amul’s brand equity or growth in India.

Though global food majors such as Mars, Kraft Foods, Danone and LandoLakes visited India recently, GCMMF is clearly unwilling to help the growth of competing brands at the cost of is own brand. Most of the global brands are courting GCMMF to leverage its distribution strength for their brands in the attractive Indian market and build India as a hub for low-cost milk supplies.

Amul's interest in a JV with a global partner is to gain a foot hold in new markets and ensure higher profit margins at the farm gate. But the interest in improving farm profits by tapping the massive growth opportunities in foreign shores comes with the worry about protecting brand Amul.

Read more in The Economic Times article.