Milkfed plans to tap Delhi market for Verka products

Punjab State Cooperative Milk Producers Federation Limited, popularly known as Milkfed, is planning to launch its Verka brand of milk and milk products in a big way in the national capital, people familiar with the matter said.

Milkfed is already selling 30,000 litres of milk in Delhi every day besides milk products, such as butter, cheese and milk powder, in varying quantities depending on the season of the year. The consumption is mainly limited to households, and the Punjab government now wants to tap the government sector, such as schools, childcare centres and government-run hospitals, it is learnt.

“We see a huge scope in this sector. We have mooted a proposal before Delhi’s cooperation minister and we are hopeful of a positive development on this front,” said a Milkfed officer not willing to be named, as according to him the proposal was at a “very premature stage”.

The Delhi government has reportedly asked Milkfed to approach it via the tendering process like other milk-supplying companies, but the federation wants to enter into an agreement by negotiating the rates. With the Aam Aadmi Party (AAP) in power in both Punjab and Delhi, the federation is hopeful of finding a middle ground.

Key challenges

With 7,000 milk collection centres connected to 11 district-level cooperative milk unions, Milkfed has a strong network across Punjab. However, in the national capital, it faces a tough competition from other strong brands such as Amul and Mother Dairy.

The Milkfed management is of the opinion that a drastic rate cut is not possible as the federation functions on “no profit, no loss” basis and factors such as milk being a perishable commodity and Delhi being situated at a distance of about 250 kilometers from the state capital are to be considered.

In Punjab, which has the highest per capita milk availability of 1,070 millilitre (against the national average of 360 ml), milk production in five years has grown by 17% though processing has not gone up at the same pace, as per figures made available by Milkfed.

On an average, Milkfed processes 21 lakh litres of milk every day and there is still an enormous scope as dairy farmers in the state produce 210 litres of milk daily. “The daily quantities keep fluctuating, but the yearly average comes to this. There is a huge surplus of milk as we process only 10% of what is available,” said the officer cited earlier.