Ghee suppliers formed cartel to secure TTD contract: TDP

When milk prices are rising across the country, why has there been a huge fluctuation of nearly 20 percent in ghee prices? TDP, which is a key constituent of the ruling NDA alliance in the state, raised this question while levelling fresh allegations of cartel formation during the previous YSRCP regime.
TDP spokesperson Neelayapalem Vijay Kumar alleged that during the five years of YSRCP rule, only a handful of companies participated in reverse tendering and secured supply contracts from Tirumala Tirupati Devasthanams (TTD).

He further claimed that at least 150 crore changed hands in ghee procurement in the form of commissions.

Vijay Kumar, who on Saturday revealed the prices quoted by various ghee suppliers over the last five years, alleged that they formed a cartel with the active connivance of those at the helm in TTD, and tenders were allotted in a circulatory manner. He stated that the company which emerged as L1 (lowest bidder) quoted a higher price in the subsequent tender and stood in second place, while the company in second place secured the tender by quoting a lower price.

All tenders were allotted in a similar fashion over the last five years to a handful of companies, mostly from the states of Maharashtra, Rajasthan, Uttar Pradesh, and Uttarakhand, he alleged, while wondering why no company or farmer cooperative dairies from the Telugu states or South India participated or withdrew from the so-called ‘reverse tendering’.

Giving the example of Vaishnavi dairy from Andhra Pradesh, which supplied ghee at a price lower or equivalent to its northern counterparts, he said it was the only company that continuously secured tenders for the last five years when all other dairies from the whole of South India cited their inability to supply ghee at that price.

He also pointed out the difference between the prices quoted by the dairies that supplied ghee in different tenders called by the TTD. “The difference in ghee prices ranges up to 20 percent, and surprisingly, they reduced prices by up to 137 in the reverse tendering process. In Jan 2022, M/s Premier Agri Foods (Bareilly) filed the first bid for 475/kg and 467/kg in the reverse bid to become L1. The same company, in June 2022, filed the first bid for 418.52/kg and a reverse bid of 329/kg, which was 137 less than the earlier price quoted,” Vijay Kumar pointed out.

Ghee is not a speculative commodity to have this kind of fluctuations and volatility in its prices, he said. “The fundamental question here is when the raw material price, which is milk, is constantly going up, how can these companies reduce the price of ghee if they haven’t done any mischief?” he asked, and urged the new SIT, to be formed following the directions of the Supreme Court, to take all these aspects into consideration and conduct a deeper investigation not only into ghee but also into the procurement of other materials used in the preparation of laddu and other prasadams at Tirumala temple.