Why Has TN Milk Cooperative ‘Aavin’ Not Passed on GST Benefits While Rivals Slash Prices?
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Synopsis
Consumers in Tamil Nadu are left waiting for lower dairy prices as Aavin, the state-run milk cooperative, has yet to adjust its rates despite significant reductions in GST. As competitors cut prices, Aavin's customers feel the pinch, especially with the festive season approaching.
Key Takeaways
- Aavin has not yet adjusted prices post-GST cut.
- Competitors have significantly reduced their prices.
- Consumers are feeling the burden of higher prices.
- Formal state orders are necessary for Aavin to change prices.
- Upcoming state decisions will affect future pricing strategies.
Chennai, Sep 22 (NationPress) Consumers in Tamil Nadu might need to hold off a bit longer for more affordable ghee, butter, paneer, and other dairy products, as the state-owned Aavin has yet to adjust its prices even after the Goods and Services Tax (GST) on these items was reduced from 12 percent to 5 percent.
While competitors like Amul, Nandini from Karnataka, Milma from Kerala, and various private brands have lowered their prices starting Monday, Aavin outlets are still selling products at their previous prices.
Brands such as Amul and Nandini, along with Milma and other private dairies, have slashed prices on items like ghee, paneer, butter, ice cream, chocolates, and more by Rs 25 to Rs 40. For example, a litre of ghee now costs Rs 610, down from Rs 650. Amul has applied price cuts across over 700 products, while Nandini has focused on about 15 items. Milma has also reduced the prices of 100 items from Monday.
In contrast, Aavin outlets located in Ambattur, Anna Nagar, Adyar, Korattur, and Thiruvanmiyur in Tamil Nadu stated that they have not received any orders to lower prices.
Officials from the Tamil Nadu Cooperative Milk Producers Federation (TNCMPF), which manages Aavin, explained that since their prices are set including GST, a formal state directive is necessary before any price reductions can take effect.
As of late Sunday night, no such directive had been issued, leaving Aavin customers disappointed, particularly with the festive season approaching.
“It’s unfair for Aavin to maintain higher prices when private brands are cutting their ghee and butter prices by Rs 20 to Rs 30 per kg,” commented a resident of Ambattur. Rather than a price reduction, the GST adjustment has effectively increased Aavin's base price, keeping retail prices steady, which means consumers are paying slightly more.
Franchise owners acknowledged that this predicament has placed them at a disadvantage compared to private competitors.
Aavin processes approximately 35 lakh litres of milk daily, with 8-9 lakh litres being transformed into value-added products. The cooperative's annual sales total around Rs 600 crore, with significant contributions during festive seasons; for instance, during last year’s Deepavali, sales reached Rs 126 crore.
With GST cuts already in effect nationwide, the upcoming decision from the state government will determine if Aavin aligns its prices with other major cooperatives.
Point of View
The current situation reflects a significant gap between state-run enterprises and private competitors in pricing strategies. As consumers seek affordability, Aavin's delay in passing on GST benefits raises questions about responsiveness and competitiveness in the dairy market.
NationPress
22/09/2025
Frequently Asked Questions
Why hasn't Aavin reduced its prices?
Aavin has not lowered its prices because a formal state directive is required for any price adjustments, despite the GST reduction.
Which dairy products have seen price cuts?
Products like ghee, butter, paneer, ice cream, and chocolates have experienced price reductions from various private brands.
How does Aavin's pricing compare to its competitors?
Aavin's prices remain higher compared to private competitors who have reduced their prices significantly following the GST cut.
What impact does this have on consumers?
Consumers are disappointed as they are not benefiting from the GST reduction and are paying more than they would at private brands.
What will determine Aavin's future pricing?
The state government's upcoming decisions will dictate whether Aavin will adjust its prices in line with other major cooperatives.
