Amul gains edge over Mother Dairy in race to run Delhi Milk Scheme

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New Delhi, December 05, 2018:  Amul brand owner Gujarat Cooperative Milk Marketing Federation (GCMMF) has outbid government-promoted Mother Dairy in the race to run beleaguered dairy retail unit Delhi Milk Scheme (DMS), people aware of the matter said. A final decision though is still pending.

GCMMF has offered Rs 42.30 crore as annual rent for use of DMS’ property, machinery and retail network in Delhi, compared with Mother Dairy’s offer of Rs 42.20 crore, industry executives said, requesting not to be named. The financial bids were opened on November 27.

An official of the agriculture ministry said, “Both the financial bids were accepted and submitted to the bid evaluation committee. Amul has offered the highest bid. Now the evaluation process and commercial formalities will begin and once it’s completed, we will announce who will run the DMS operations.”

The rent agreement will be for an initial period of 30 years. A decision on the proposal to give the assets of DMS on lease was pending since the time of the UPA government. DMS, started by President Rajendra Prasad in 1959, has a milk processing unit with capacity of 5 lakh litres a day spread over 25 acres in the national capital. It also has five milk collection and chilling centres and 566 milk booths in the Delhi NCR region. The retailer employees about 700 people according to economictimes.indiatimes.com.

An industry analyst said that DMS, which has piled up losses of nearly Rs 900 crore, will now be able to clear its dues.

“Amul, in its bid, has said it will give Rs 42.30 crore annual rent with an annual increase of 7%. So in its 30 years of operation, total rent will be close to Rs 3,400 crore, which can clear the huge financial burden DMS has,” said an industry executive in the know. He said there shall be a net gain by way of realised lease rentals.

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