Mumbai: Long supply chain causes overcharging for milk

The problem of overcharging for milk can be checked if retailers get the product directly from distributors, officials from the legal metrology organisation (LMO) said.

The problem of overcharging for milk can be checked if retailers get the product directly from distributors, officials from the legal metrology organisation (LMO) said.

To this end, the department has asked cooperative milk companies to ensure a three-tier supply chain of firm-distributor-retailer is maintained.

Milk companies are supposed to pass the products to distributors, who supply it to the stores from where you buy it. However, in the past few years, distributors have engaged sub-distributors, which increases the cost of the product for retailers. They, in turn, overcharge consumers to make a profit, said LMO officials.

In the past three weeks, the department has observed that overpricing is prevalent only for a few popular brands, while the lesser-known ones are sold at the maximum retail price (MRP). This shows a longer supply chain leads to cost escalation, officials said.

“We have suggested to the companies that they maintain a three-tier supply chain. There should be no sub-distributors. It is the company’s responsibility too to ensure their packed commodity reaches the consumers at the right price,” said Sanjay Pandey, controller LMO.

Milk packaging companies have been asked to create awareness about overcharging among citizens, through the media.

The LMO has also asked Aarey depots to sell products of other milk cooperatives.

“Allowing the other brands to sell at Aarey depots will curb the overcharging problem. The Aarey depot owners or attendants will be accountable to the dairy development department,” said Pandey.

In the past week, the LMO has received 96 overcharging complaints against Amul, 44 against Gokul 44, six against Aarey and four against Mahanand.

“We have already asked our distributors to ensure there is no overchraging. The number of layers in the supply chain is an internal issue and should not affect the consumers,” said Dattaray Ghanekar, managing director Gokul dairy.

Some milk cooperatives demanded booths to sell milk in the metros, to shorten the supply chain.