FMCG Industry Adapts to New GST Rates with Temporary Price Adjustments
The implementation of new GST rates has led FMCG players to temporarily adjust product prices away from popular 'magical' price points. Despite initial difficulties in manufacturing changes, companies expect to return to standard price points within two months, maintaining affordability and quality for consumers amid tax changes.
- Country:
- India
With the recent reduction in GST rates, fast-moving consumer goods (FMCG) companies face challenges in setting new product prices, but anticipate a return to their popular price points within the next two months.
These adjustments see small packs like Parle G biscuits and shampoos abandoning the typical Rs 2, Rs 5, and Rs 10 price markers in favor of non-standard pricing to immediately pass on tax benefits to consumers. Industry experts indicate these changes are temporary, as firms didn't have enough time to alter production logistics before the new rates took effect.
The two-slab GST system, which began on September 22, prompted cuts across various sectors, from food to electronics, illustrating the FMCG sector's agility in navigating regulatory reforms while ensuring consumer affordability.
(With inputs from agencies.)
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- GST
- FMCG
- price points
- tax reform
- magical prices
- consumer goods
- Rs 5
- Rs 10
- affordability
- tax benefits
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