FMCG products to see decline in volume post GST: Britannia

Consumption stocks continue to bleed on demonetisation

Latest News – FMCG products will see a decline in volume in the short term with channel partners of companies keeping less stock in view of GST, which is set for July 1 launch, according to Britannia Industries.

The company, however, said that with tax rates for the overall biscuit category being largely neutral, GST would provide a level-playing field to organised players in the industry.

 

“This is going to be a fairly tight month, especially for FMCG companies, as trade will down-stock, no matter, how much communication and assurances are sent out to them,” Britannia Industries Managing Director Varun Berry told PTI.

This will take a toll on volumes in the short term, say for the next three months, he added.

It will be crucial for companies to keep a tab on what is happening at the ground level due to the new taxation system and keep communication open with their channel partners, Berry said in an e-mailed response.

“The key thing is to have the ear to the ground in the next 3-6 months, which is the time (when) there is a likelihood of disruptions due to channel down-stocking and consumers are also likely to be cautious in ensuring they maintain a balance of their entire shopping basket,” he added.

The government has (Read More)

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