The company has already begun acquiring milk-processing units in and around Punjab, having built up a procurement capacity of four lakh litres of fresh milk per day.
NEW DELHI: Reliance Industries may just have to do a rethink on retailing of dairy products. The company has already begun acquiring milk-processing units in and around Punjab, having built up a procurement capacity of four lakh litres of fresh milk per day.
This will eventually be scaled up to seven lakh units per day. But when it comes to getting this procured milk processed and branded for pouches and for processed dairy products such as cheese, paneer, yogurt and butter, it seems, RIL may not find the going very smooth.
RIL is believed to have initiated discussions with leading dairy products companies such as Mother Dairy, Gujarat Cooperative Milk Marketing Federation (GCMMF which sells the Amul brand) and Nestle for forging processing and branding partnerships. According to sources, RIL has initiated talks on two aspects — getting them to source some of their daily fresh milk requirements from RIL and contract manufacturing some processed dairy products for Reliance’s retail needs.
Even co-branding possibility —- where the dairy company will process and package for RIL as long as its own brand name is used in addition to an RIL private label - is not being ruled out.
But are these companies ready to play second fiddle in the fiercely aggressive milk and dairy products market of north India?
In fact, GCMMF transports all the milk for north from Gujarat. Says R S Sodhi, general manager (Marketing), GCMMF: “We have no plans to contract manufacture dairy products for anyone.”
Says an industry veteran: “RIL may ultimately have to turn to smaller, regional brands for sourcing its private label requirements in the dairy segment. The bigger brands may be more interested in grabbing market share for themselves.”
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