The company says that prices on its marketplace are determined by individual sellers and all dairy partners and sellers continue to get their full agreed price for products they supply
After Bangalore Milk Union (Bamul) alleged that Flipkart was undermining the interests of dairy farmers after it advertised milk at Rs 1 per half litre on Flipkart Minutes, the Walmart-backed ecommerce platform clarified that it runs limited promotional campaigns periodically on select items.
The company said that prices on its marketplace are determined by individual sellers and all dairy partners and sellers continue to get their full agreed price for products they supply. Farmer procurement prices do not get impacted, the company said as per the reports. It runs these campaigns, often in partnership with banking partners.
The controversy stems from a complaint made by the Union over the company selling milk at Rs 1 per half litre on Flipkart Minutes, as part of a customer acquisition campaign. DK Suresh, President of the Union released copies of the representation sent to Prime Minister Narendra Modi and the complaint made the Competition Commission of India (CCI).
“The advertised sale price of Rs 1 per litre appears to be significantly below the economic cost of procurement, processing, packaging, transportation, cold-chain management and retail distribution of milk. Such pricing does not appear commercially viable in normal market conditions and may be supported through platform subsidies or investor-backed promotional strategies,” the letter mentioned.
Suresh added that this raised concerns under Section 4 of the Competition Act 2002, which prohibits abuse of dominant position. Explanation (a) to Section 4 defines predatory pricing as the sale of goods or services below cost with the intention of reducing competition or eliminating competitors like Nandini, Bamul, he noted.
He urged CCI to assess the potential impact of such pricing strategies on farmers, cooperative institutions and small retailers, particularly in markets where quick commerce platforms are rapidly expanding. He also request the commission to initiate an immediate investigation into deep discounting practices in the sale of milk and other farmer-produced essential commodities by the quick commerce platforms.
