A primary point of contention involves the proposed removal of the long-standing 200-metre buffer distance between neighboring Aavin milk depots. The Madurai Aavin Milk Agents and Retail Sellers Association warned that eliminating this territorial restriction would cause market saturation and trigger aggressive intra-brand competition among vendor outlets. While cooperative officials contend that removing the distance requirement could expand market access and overall fluid milk sales, retailers argue it will fragment existing customer bases without increasing net consumption.

The proposed regulations also shift substantial logistical and inventory risks onto independent milk agents. Under the draft terms, agents would be held solely accountable for product spoilage and required to handle the physical loading and unloading of sachet crates from delivery vehicles. Representatives from vendor unions questioned the fairness of transferring handling duties, noting that transport vehicles already collect loading fees from the primary processing facility. Furthermore, agents questioned the necessity of submitting personal property details for processing, given that distribution operates on a strict cash-and-carry financial model.

Financial margins remain an underlying driver of retail friction, with vendors noting that Aavin’s sales commissions remain significantly lower than those offered by private dairy competitors. Retailers warned that imposing stricter operational burdens without adjusting profit margins risks driving agents toward competing private processors, potentially weakening the cooperative’s urban distribution network. Vendor leadership called for an immediate suspension of the draft rules to preserve long-term commercial relationships between the federation and its retail partners.