Cold war in India

Cold war in India

Court asked to settle marketing dispute between makers of ice cream and frozen desserts

Vendors of ice cream and snacks await customers on a beach in Pondicherry in the Indian state of Goa. Dmitry Rukhlenko
Vendors of ice cream and snacks await customers on a beach in Pondicherry in the Indian state of Goa. Dmitry Rukhlenko

As the sun begins to scorch the earth and demand for cold foods and drinks is on the rise in India, a cold war has broken out between companies manufacturing ice creams and frozen desserts.

Hindustan Unilever Ltd, the owner of the popular Kwality Wall's brand, is suing the Gujarat Cooperative Milk Marketing Federation (GCMMF), the maker of Amul brand ice cream, in the Bombay High Court, alleging that the latter's advertising disparages frozen desserts.

Commercials that have been on the air since March exhort parents to feed their children "real milk Amul ice cream" and not products made with vegetable oil. Emphasising that products made with vegetable oil are called "frozen desserts", it tells consumers to differentiate between the two types of cold treats.

Hindustan Unilever is seeking the removal of the advertisement, claiming that it makes "factually incorrect statements" that have "created apprehensions among the consumers of frozen desserts".

The GCMMF has called the court petition "a stunt" by the local unit of one of the world's largest consumer-goods multinationals "to pressure and frighten us into submission". It defends its advertisement a way of informing consumers about the difference between ice cream and frozen desserts.

Hindustan Lever, with annual sales in India exceeding US$5.1 billion, maintains that there is only minimal difference between ice creams and frozen desserts, adding that using vegetable fat is a healthier alternative to dairy fat.

The company has seized on one particular moment in the commercial when the announcer refers to frozen desserts containing vanaspati, a hydrogenated vegetable oil. It says its products contain vegetable fats but not hydrogenated vegetable oil.

Unlike ice cream which is made from dairy fat and milk solids, frozen desserts are a mix of vegetable fats and milk solids. Besides Hindustan Unilever, Gujarat-based Vadilal, Kolkata-based Fresh & Naturelle and other companies market frozen desserts in India and are taking a keen interest in the outcome of the court case. Unilever and Vadilal also make ice creams.

Other popular ice cream makers in India include Mother Dairy Fruit & Vegetable, Havmor, Creambell, Arun and Nirula's.

The main reason behind the Amul advertisement is a desire to increase sales of the product in the $1.16-billion Indian market, where frozen desserts account for about one-third of annual sales.

GCMMF managing director RS Sodhi said last month Amul was aiming for sales of around $165 million in the current financial year. He said the company had no intention to withdraw its commercial but declined to comment further as the matter is still before the court. A spokesperson for Hindustan Unilever also declined to answer questions from Asia Focus on the same grounds.

Owned by the Anglo-Dutch multinational Unilever, Mumbai-based Hindustan Unilever markets dozens of products under four categories: food and drink, home care, personal care and water purifiers.

Santosh Desai, managing director of Futurebrands, a brand and consumer consultancy, said the clash between Amul and Hindustan Unilever was a straightforward case of an aggrieved party seeking a court injunction. "One party feels hard done by because of the advertisement. It did not have too many options (but to approach the court)," he said.

Mr Desai acknowledged that the publicity surrounding the case could damage Unilever, while Amul did not have much to lose by taking court action. Ultimately, he added, Indian consumers would be the final arbiters in the case.

Dilip Cherian, another image consultant, said frozen desserts made with hydrogenated fat -- which is not used in Wall's products -- could lead to obesity among children. He claimed that Unilever was selling an inferior product at an unjustifiably high price.

Mr Cherian believes the Gujarat milk producer is well within its right to call its product "real milk ice cream". He said Hindustan Unilever had managed to persuade millions of consumers, through its high-pressure marketing, that its product was comparable to or the same as ice cream when in fact it was distinctly different.

This is not the first time that Hindustan Unilever and Amul have tangled in a legal dispute. In 2012, Amul dragged Hindustan Unilever to the Advertising Standards Council of India (ASCI), alleging that the multinational marketed Kwality Wall's as ice cream although it was made with vegetable fat and not dairy fat. The regulator asked Hindustan Unilever to sell such products as frozen desserts.

Nor is the conflict between the pair limited to the advertisement. Attempts have also been made by both sides to run down the product of the rival.

Amul says frozen desserts use vegetable fat which is several times cheaper than milk or dairy fat. Yet the Hindustan Unilever products are priced higher than the Amul ice cream, it points out. Hindustan Unilever, on the other hand, argues that since frozen desserts contain vegetable fat and not dairy fat they are free from cholesterol and healthier.

The clash has divided the entire industry with ice cream makers aligning with Amul and frozen dessert manufacturers siding with Hindustan Unilever.

Mother Dairy, a subsidiary of the National Dairy Development Board (NDDB), has also become more aggressive in campaigning for its milk-based ice creams.

"As a responsible organisation, Mother Dairy manufactures and markets ice creams that are made using milk fat, milk protein and milk solids as major ingredients derived from milk, in compliance with standards described under the FSSAI (Food Safety and Standards Authority of India) regulations," Randhir Kumar, deputy general manager for dairy product marketing, told Asia Focus by email.

Devanshu Gandhi, managing director of Vadilal Group, appeared to be critical of Amul. "Technically you cannot denigrate another product. No one says Amul is making chocolate from vegetable oil. Does it not use coconut oil in chocolates?" he asked rhetorically.

The GCMMF originated as a cooperative in the villages of Gujarat state seven decades ago. Today more than 15 million milk producers belong to 144,500 dairy cooperative societies across the country. Milk is processed in 184 district cooperative unions and marketed by 22 state marketing federations. The cooperative, headquartered in Anand, a town in Gujarat, markets a total of 18 milk products including chocolates and ice creams apart from milk.

Do you like the content of this article?
COMMENT