FMCG, auto products’ sales pick up pace in rural India, outsmart cities

download (4)MUMBAI/KOLKATA: Purchases of consumer products and automobiles in rural India picked up pace during July-September, outstripping the rate in cities, as a good monsoon lifted farm income. Rural sales of FMCG products by both value and volume — the number of products sold — increased 13% during the quarter from a year earlier, according to Kantar Worldpanel, the consumer insights arm of WPP, the world’s biggest advertising company. It was the fastest pace of growth in over three years.

In contrast, the urban market expanded 4% by value and 1% by volume during this period, the researcher said.

This is the second consecutive quarter of double-digit growth in the rural FMCG market, which helped to boost volumes in the overall fast-moving consumer goods sector by 7% compared with about 4% a year earlier. The rural market accounts for more than a third of all consumer goods sold. “In our case, rural growth has been very good.
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Post tax rate cut, FMCG firms set to reduce prices

index.jpgSource: The Economic Times, Nov 13, 2017

Manufacturers would need to strategise on passing on the GST reduction, depending on the extent of the stock with each intermediary in the supply chain and other factors.

Prices of shampoo, chocolates, nutrition drinks and condensed milk are set to drop 5-15% after the GST Council eased these from higher tax slabs.

Companies such as Hindustan Unilever, Dabur, Amul, GlaxoSmithKline, Procter & Gamble, Nestle and Perfetti Van Melle said they have either decided to reduce prices or are planning to do so after the GST Council cut tax on several consumer goods to 18% from 28%. They, in fact, are also bound by the anti-profiteering clause under the GST law to pass on any benefit from lower tax incidence to consumers.

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Sales of FMCG firms signal consumer demand revival

Source: LiveMint.comn, Nov. 03, 2017

A surprise increase in sales volumes of consumer packaged goods companies has boosted hopes of a recovery in consumption demand, indicating the possible end of the lingering effects of last year’s demonetisation and the fallout of the move to a goods and services tax (GST) regime in July.

Hindustan Unilever Ltd, India’s largest consumer packaged goods maker, reported a 4% volume growth in the three months to September compared with flat growth in the previous quarter. Read the rest of this entry »

Poor rains, global headwinds hinder FMCG growth

Source: The Hindu Business Line, Oct 08, 2017

Mumbai: The growth rate in India’s fast-moving consumer goods sector has slowed down in the past three years, hit by poor monsoons, global headwinds and buyers cutting down on discretionary spending.

The combined revenue of listed FMCG companies such as Hindustan Unilever, ITC, Nestle India, Dabur, Asian Paints, Tata Global Beverages, Britannia Industries, United Spirits, Radico Khaitan, United Breweries and Colgate-Palmolive, among others, has grown at a CAGR (compound annual growth rate) of 4.4 per cent in the last three years, sharply down from 13.6 per cent CAGR between FY12 and FY14.

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Britannia plans Rs 1,000 crore plant in Maharashtra

index.jpgSource: The Economic Times, Aug 08, 2017

KOLKATA: FMCG major Britannia Industries plans to set up its largest plant at Ranjangaon Food Park in Maharashtra with an investment of Rs 1,000 crore, a company official said on Monday.

“The company is planning to set up its largest plant at the Ranjangaon Food Park…,” company Chairman Nusli Wadia told shareholders at the 98th Annual General Meeting here.

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Anti-profiteering turns out to be weighty issue for FMCG companies

Source: The Economic Times, June 08, 2017

MUMBAI: If you buy a soap or a bottle of shampoo this month, chances are it will weigh less than what it did about a month ago.

The difference in weight could be there because of fast-moving consumer goods (FMCG) companies, fearing penalties in case their profits go up after the goods and services tax (GST) comes into force, are adopting innovative price/value strategies to insulate themselves. Under anti-profiteering rules of GST, any company or vendor whose profits jump due to the new tax regime must pass on the benefits to consumers.

So, companies are adopting this temporary measure and would bring the prices back to where they were after GST.

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Consumer goods firms see a sales revival in March quarter

Source: LiveMint.com, Feb 16, 2017

New Delhi: Consumer packaged good companies expect sales to revive in the March quarter after a government decision to outlaw high-value banknotes in November and the ensuing cash scarcity crimped sales.

Company executives cited increased stocking by wholesale traders by way of evidence. This, they said, indicated better demand from retailers and, in turn, from consumers.

“We believe the consumer staples sector should see better days ahead because most companies in their conference calls have highlighted that the wholesalers are slowly getting back to business,” said Sunita Sachdev, an analyst with UBS Securities India Pvt Ltd.

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