After Britannia, now Parle hit by slowdown, says ‘GST responsible for it’
Mayank Shah, category head at Parle Products Ltd held higher slabs in Goods and Services tax and lack of adequate government stimulus responsible for the slowdown in demand
Parle Products Private Limited said that product demand for its products has diminished in the past two quarters.
In an exclusive interview to Bloomberg Quint, Mayank Shah, category heads at Parle Products said,“Consumers have become more value-conscious during the times of slowdown in the last six months. Consumers are not buying enough. Offtake from the shops is getting affected. The number of shops stocking these products is the same, but the number of products being sold from these shops is going down due to weakening consumer demand,”
His remarks came after Varun Berry, managing director, Britannia Ltd, in a post-earnings conference said the consumers are thinking twice before buying even a ₹5 product. He indicated towards a “serious issue in the economy”.
“We’ve only grown 6 per cent and the market is growing slower than that,” Varun Berry, managing director at the maker of Good Day and Tiger biscuits, said.
Britannia Industries market shares have declined more than 3 per cent since it announced its first-quarter results on August 9, 2019.
Mayan Shah of Parle Products held higher slabs in Goods and Services tax and lack of adequate government stimulus responsible for the slowdown in demand.
“Imposing higher taxes on biscuits bought typically by lower-income consumers will definitely impact sales. The government needs to spruce up demand. There has also been a long pending demand to reduce GST on biscuits priced at ₹100 per kg or below.”
“These biscuits were taxed at only 12-14 per cent under the previous excise and value added tax regime. Under GST, they are priced at 18 per cent. This forces companies to increase prices, impacting sales,” said Shah