11 Aavin CF agents downgraded as wholesalers

This follows the milk major being saddled with additional expenditure despite the C&F agents not performing according to the conditions in the agreements they signed with the federation.

The move sent shock waves through the districts with many from neighbouring regions making discreet enquiries as to what was planned for district milk unions. Top Aavin sources said that in a marketing division proceeding dated July 2, 2021, the federation downgraded the 11 C&F agents to wholesalers to save the cash strapped milk behemoth a total opportunity cost of Rs 1.22 crore for the October 2020 to June 2021 period, sources revealed. Similarly, the milk sale should have been above 6 lakh litres daily, but it never crossed 5.65 lakh litres for the above mentioned period, sources added.

Though sales increased to 5.2 LLPD, it again fell short of the 6 LLPD targeted for 2019. Though C&F agents were given incentives of Rs 0.75 per litre, the milk major faced an additional expenditure of Rs 15.39 crore annually without the target being achieved, sources explained.

Similarly, agents were to use cash and carry method for milk payment with a three-month relaxation, but they continued to use the cheque method which gave them indirect credit for two to three days worth Rs 6.75 crore. Also while the total security deposit of the 11 agents should be Rs 11.66 crore, it was only Rs 5.52 crore despite repeated reminders

. The present downgrade is expected to save Aavin roughly Rs 4.24 lakh daily amounting to a Rs 15.24 crore annually.