The entry of SUMUL is apparently created the high amount of insecurity amongst the management of Goa Dairy and same becomes evident with their resolution to move to the court against the business policies SUMUL.
Based on the available information, Goa Dairy had called for an extraordinary general body meeting to resolve the issue of Gujarat-based SIMUL. Based on the resolution passed in the meeting the Goa Dairy has decided to move to the court to oppose the proposed plant setup of SUMUL in Goa. “We are already in the process of seeking the legal advice on this issue,” said the Chairman of Goa Dairy Baburao Fatto Desai.
[su_expand more_text=”READ MORE” less_text=” ” height=”0″ hide_less=”yes” link_style=”button” link_align=”center”] Goa Dairy started its operation in Goa in 1983 which was based on the similar business model that AMUL (Anand Milk Union Limited) works on. According to that model the union was formed comprises of village level cooperative societies, district level and state level societies. Based on the agreement that was signed between the National Dairy Development Board (NDDB), Union Government and Goa Government, making it mandatory by law that, all the milk producers and dairy farmers in Goa will sell their milk produce only to the Goa Dairy.
The report says that Goa Dairy may also oppose SUMUL on the grounds of their contract with the state and union government which provides them the complete authority to deal directly with the local milk producing farmers. The sources have revealed that after failing to get the SUMUL’s permission revoked, Goa Dairy have convened the extraordinary general body meeting (AGM) to discuss the aftermath of the state by SUMUL.
According to the sources in Goa Dairy, the Gujarat-based milk producers SUMUL is posing a threat to them. SUMUL is planning to set up the large-scale dairy farm in Goa and also decided to procure the milk from the local milk producers and dairy farmers. The meeting also passed the resolution to pay the higher amount to the farmers compared what SUMUL has apparently proposed to offer them. Although Goa Dairy did not freeze on the rates since the SUMUL has yet to declare its rate. “Goa dairy will decide rates when the time comes. Presently we pay 25.50 a litre of milk,” said the Managing Director N C Sawant.
It seems like the entry of SUMUL has brought the good luck to the dairy farmers as Goa Dairy now decided to pay the higher rates to them. It is the fact the competition makes the market work in competitive environment giving the benefits to the consumers. Perhaps the entry of SUMUL may result in making Goa Dairy more competent into the Goa market. At the end of the day, the only rate will decide the fate of both the rivals. Please leave your comments and suggestions on this issue.
Source: Various Sources [/su_expand]