Soaps, cosmetics & other FMCGs may get cheaper
Fast-moving consumer goods (FMCG) may become marginally cheaper for consumers following the 2% reduction in excise duty.
By TNN |
NEW DELHI: Fast-moving consumer goods (FMCG) may become marginally cheaper for consumers following the 2% reduction in excise duty. However, a large part of FMCG product manufacturing is based in excise-free zones like Uttaranchal and Himachal Pradesh. The final impact of the excise duty reduction on product prices will depend on the ratio of manufacturing in excise-free zones to that in nonexcise free zones.
Companies like Hindustan Unilever (HUL), Procter & Gamble (P&G), Godrej Consumer Products (GCPL), Colgate , Dabur and Marico have production facilities at excisefree zones. The excise reduction , nevertheless, strengthens the hands of marketers who will benefit from cost reductions on packaging materials and may intensify promotions to boost sales.
GCPL executive director & president H K Press said: ������ A large part of our manufacturing takes place in excise-free zones and thus the impact is not much. We are not planning to reduce prices as raw material costs are seen to be bottoming out.''
Press said the company may increase trade and consumer offers. Dabur India executive director Rajan Varma said: ������ There could be some savings on excise paid on raw materials, which would result in overall cost efficiencies and savings for Dabur India.''
The categories on which excise duty has come down from 10% to 8% include soaps, skin-care , shampoos, hair oils, hair colours and cosmetics among others.
Encouraged by the news, a P&G spokesperson said: ������It should stimulate consumer demand. We will assess the implications of this reduction and take decisions as is appropriate.'' Prices of certain products were recently dropped by market leader HUL, which witnessed a volume growth decline in soaps and detergents in the December quarter.
Companies like Hindustan Unilever (HUL), Procter & Gamble (P&G), Godrej Consumer Products (GCPL), Colgate , Dabur and Marico have production facilities at excisefree zones. The excise reduction , nevertheless, strengthens the hands of marketers who will benefit from cost reductions on packaging materials and may intensify promotions to boost sales.
GCPL executive director & president H K Press said: ������ A large part of our manufacturing takes place in excise-free zones and thus the impact is not much. We are not planning to reduce prices as raw material costs are seen to be bottoming out.''
Press said the company may increase trade and consumer offers. Dabur India executive director Rajan Varma said: ������ There could be some savings on excise paid on raw materials, which would result in overall cost efficiencies and savings for Dabur India.''
The categories on which excise duty has come down from 10% to 8% include soaps, skin-care , shampoos, hair oils, hair colours and cosmetics among others.
Encouraged by the news, a P&G spokesperson said: ������It should stimulate consumer demand. We will assess the implications of this reduction and take decisions as is appropriate.'' Prices of certain products were recently dropped by market leader HUL, which witnessed a volume growth decline in soaps and detergents in the December quarter.
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