Ahmedabad: On 20 March 2006, Verghese Kurien resigned from Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) as chairman, a post he had held for 33 years. Eleven out of 12 board members, who had earlier elected Kurien as chairman for yet another three-year term, had turned against him, moving a no-confidence motion to be voted on at an extraordinary general meeting (EGM). With pressure mounting, Kurien stepped down before the EGM.
It is ironic that one of the directors who took the initiative in ousting Kurien, P.G. Bhatol, now chairman of the Rs8,000 crore GCMMF, known for marketing milk and milk products under the Amul and Sagar brands, is facing a similar no-confidence motion at the federation’s EGM on Saturday. Ten of the 13 members of the board are against him. But unlike Kurien, Bhatol does not want to give up. He wants to fight it out.
The federation’s board wants to cut short Bhatol’s tenure, which would have come to an end in September 2011, by one year. Leading the brigade is Vipul Chaudhary, chairman of Dudhsagar Dairy, Mehsana, one of the members of the federation.
Ironically enough, both Chaudhary and Bhatol claim to have the backing of the Bharatiya Janata Party (BJP) that rules the state.
While the chairpersons of district milk producing unions are members of the board and powerful in their own areas, heading GCMMF gives them the added clout of running Asia’s largest dairy federation with at least 3 million members from about 12,000 villages in Gujarat. GCMMF markets 76 products under the Amul brand and has a daily average milk collection of 8.7 million litres.
GCMMF announced record sales of Rs8,005 crore on Wednesday, a growth of 19.3% over the previous year. It leads in pouch milk sales in Delhi this year, helping Amul to emerge as the largest selling brand of milk in Delhi, Mumbai, Kolkata and Ahmedabad.
Apart from big money and power, politics also plays a major role at GCMMF, say people familiar with the dairy movement in the western state. Kurien had all along stayed away from BJP, the party that rules the state. On the other hand, most of Gujarat’s milk unions have now swung over to BJP, after having been Congress-held until recently.
“GCMMF is in an ICU (intensive care unit). Its chairman is merely holding the charge after we moved the no-confidence motion,” Chaudhary said. He is confident that most of the members who signed the no-confidence motion against Bhatol last week will back his ouster at the 21 August EGM.
Bhatol said “one person”, who wants to be the chairman, is responsible for the ouster move, without naming anyone.
“He has made attempts in this direction in 2006, 2009 and is doing so for the last six months. While this man claims that the state government is with him, people around him are slowly realizing that it is not so,” said Bhatol in a phone interview. Asked whether he has the government support, Bhatol maintains: “All I can say at this juncture is that the government is not against me.”
According to Bhatol, the board members are not giving any reason for their lack of confidence in him. In 2006, too, when the board members had brought a no-confidence motion against Kurien, they did not accuse him of any irregularities.
“Kurien was ageing and a situation had arisen where he had to go. I don’t want to speak anything further on this matter as I don’t want to hurt the great man. After Kurien, everyone wants to be a chairman now as they all feel that they are greater than the other,” said Bhatol, who also heads Asia’s single largest diary, the Banaskantha District Co-operative Milk Producers Union Ltd.
Chaudhary has a grouse against Bhatol. The GCMMF chairman didn’t intervene when Chaudhary was sacked by the state registrar of co-operatives on 26 January 2007 on charges of alleged irregularities in recruitments in Dudhsagar dairy’s Manesar unit in Haryana.
The day after he was sacked, Chaudhary had accused the Gujarat government of having directed the registrar to issue the order of his suspension on a public holiday. Chaudhary was then a Congress supporter. By the time he was re-elected as chairman of Dudhsagar Dairy in 2008, he had already shifted his loyalty to BJP.
Dudhsagar Dairy contributes the most to GCMMF revenues with an annual turnover of over Rs2,000 crore.
Even if Bhatol is ousted and Chaudhary becomes the new chairman of the federation, it may not end the power struggle. Many in the federation believe that Chaudhuary’s diehard supporter Ramsinh Parmar of Kheda District Co-operative Milk Producers Union Ltd was eyeing the chairman’s post till recently. Parmar’s political allegiance is to the Congress. They fear that once Chaudhary is elected as chairman, the battle for power will resurface with Parmar claiming a stake.
Parmar does not want to discuss this, but insisted that the current controversy will not harm the brand image of Amul as it is an internal GCMMF matter. Not everyone is as sanguine.
“With every such controversy, the faith in Amul being a well-managed organization takes a beating,” said a senior GCMMF official, who did not want to be named.
“It takes years to build a brand, but if such controversies keep resurfacing, it is bound to impact the brand,” said Ajay Naqvi, executive vice-president and head, Mudra north and east, a unit of Mudra India, a communications agency that deals in brand building media campaigns. “Consumers who have built a lot of faith in the brand come to know the truth eventually.”