While Aarey has outsourced its production to a Pune-based firm, robbing the flavoured milk of its nostalgic taste, Aarey booth operators in Mumbai are favouring competitors to make an extra buck

Once the taste of Mumbai, today Energee is almost on the verge of being discontinued.

It has been learnt that Aarey's Worli dairy hasn't produced an ounce of the flavoured milk in the last few months. And the stock supplied to city currently comes from a Pune-based firm to whom Aarey has given rights for production against an annual royalty of Rs 1.38 crore. Hence, the missing nostalgic taste.



Losing ground: An Aarey booth operator selling dairy products similar to the ones sold by the state-owned dairy. Pic/Satej Shinde

Speaking to mid-day, a senior dairy officer said, “Due to low supply of milk and defunct machinery, all three government run dairies have stopped manufacturing milk products. While Worli and Goregaon dairies are partially operational, Kurla dairy has stopped operations completely. The daily supply of milk, which was once over 12 lakh litres a day, has reduced to a trickle of 50,000 litres. This highlights the downfall.”



Zero nostalgia: A new bottle of Energee manufactured by the Pune-based firm. Pic/Bipin Kokate

He added that the dairy requires special alcohol negative milk for Energee, which is expensive as compared to the regular milk. “At a time when we are finding it difficult to get regular milk, forget about procuring the special one. Even if we get it, machines aren't working.”

'Difficult to break even'

Kutwal Foods Private Limited, the Pune-based firm to whom the rights were outsourced to produce and sell the flavoured milk, is struggling to break even by selling Energee and other Aarey products claiming lack of support from Aarey booth owners in Mumbai.

Speaking to mid-day, Prakash Kutwal, chairperson of Kutwal Foods Pvt Ltd, said, “We were informed that the state dairy department has around 1,801 Aarey booths across Mumbai and another 300 across Maharashtra. But after winning the online tender of Rs 1.38 crore, we discovered that only 400 plus booths were operational across Mumbai. Surprisingly, most of them sell competitors' products, thus affecting the sale of products like Energee.”

He added that his company hasn't even thought of breaking even, as it only sells about 30 to 40 per cent of the total Energee produced despite offering a commission of Rs 3 per bottle to the vendors. “After deducting all overheads, including procurement of alcohol negative milk and delivery, we make a profit of just 50 paise per bottle,” Kutwal said, adding, “Vendors refuse to sell any other Aarey product claiming less incentives in comparison to the ones offered by the competitors. This is a setback, as it limits the reach and sale of Aarey products.”

Upon inquiry, Kutwal told this correspondent that besides procuring the rights to sell Aarey products, the company also bagged formulae for various milk products, including Energee. “We have been allowed to use the formula under the direct supervision of the Dairy Development officials. The officers conduct surprise checks to prevent the misuse of formulae. Moreover, we are also allowed to fix our own pricing for the Aarey products.”

When asked whether brand Aarey will survive, Kutwal replied positively stating that it wouldn't take more than a month to recapture the market, provided booth operators are pulled up and reprimanded for selling dairy products manufactured by other companies.

He also claimed that the previous NCP-Congress government ministers, who either had their own dairies or were associated with cooperative milk businesses, wanted Aarey to die a natural death. But the present government wants to ensure that brand Aarey doesn't fade into oblivion and is doing everything possible to revive it.

Loss making machine

Sources told mid-day that despite incurring heavy losses, the dairy department purchased an automatic continuous shelve machine for the Energee section by paying 80 per cent of R10 lakh upfront.

The machine was procured from a Gujarat-based company three years ago.

“Since the day of its installation, the machine has been lying idle. The main machine, which was imported from Denmark in 1960's, which developed a technical snag recently also remains unused. We thought that at least the new machine would help, but it conked off on day one itself,” said Vijay Sonawane, chairperson, Maharashtra Milk Employees Union.

PN Kamble, union general secretary, said, “The company engineers tried everything possible to fix the problem, but have failed so far. We have discussed the issue with the higher authorities, and they will do everything possible to recover the money paid to the company.”

When questioned about the reason for purchasing the machine without conducting a trial run, one of the officers said, “We followed the protocol and the machine conked off during the trial run.”

'We can make profit'

While the absence of a strategy has made the future of Energee look bleak, the union is confident of reviving it. “If the government provides funds and ensures regular supply of alcohol negative milk, then we can turn around the loss making dairy into a profitable venture with a single product. Currently, we procure milk at R22 per litre. If we pay extra Rs 4 per litre for fresh alcohol negative milk, we can produce five bottles containing 200 ml Energee each. With an MRP of Rs 25 (the present price), we can still make a good profit due to the huge demand for Energee across Mumbai,” said Kamble.

However, Kutwal expressed apprehensions over the success story projected by the union. “Machinery at Aarey is outdated and a major chunk of its staff is due for retirement. In today's competitive market, advanced technology and educated consumer market, emphasis must be on three areas: quality, competitive pricing and attractive packaging, which Aarey can't live up to,” he said.

Excess staff

Another bone of contention for the workers' union is the tag of surplus staff given by the government, using which it wants to fuse existing manpower into other departments.

“It's been a few years since we stopped recruiting people on general or contract-basis. At present, our staff strength is 1,600 workers across the three dairies, and is slowly diminishing. Most of us will retire in a few years. After operating machines for 25 to 30 years, these staffers can't handle non-technical work. Instead of helping us run the dairy, the government is tagging us as surplus. A protest will be called in the next few weeks against this move,” said Sonawane.

An insider claimed despite incurring losses due to plummeting dairy output, 11 officers were promoted recently. “Isn't this funny? This is like rubbing salt on the wounds,” he said.

400

Number of operational Aarey booths across Mumbai

1,801

Number of Aarey booths across Mumbai on paper

1,600

Staffers working at all the three Aarey dairies