Fast-moving consumer Goods (FMCG) companies announced a price change following a GST council tax rate rejig earlier this month. These changes will come into effect on September 22, including milkshakes, butter, ghee, jams, cheese, frozen products, ice-creams, pickles, coconut water, and tomato puree, reduced to 5% tax from 12%. UHT milk and paneer have been given relaxation from GST earlier. The price changes vary from Rs 2 to 30, depending on the product.
The GST reduction across a broad range of food products represents a significant shift that will enhance consumption. Manish Bandits, MD of Mother Dairy, who joined the FMCG hosting, said that we are passing a 100% tax benefit on to the consumer.
This step by Mother Dairy likely prompted its rivals, such as Gujarat Co-operative Milk Marketing Federation (GCMMF), the makers of Amul brand products, to lower their prices following the GST announcement. Jayen Mehta, MD of GCMMF, announced through an ad hinting at a reduction in prices to educate consumers about revised prices.
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Moreover, Hindustan Unilever (HU), Procter & Gamble (P&G) and L’Oréal have already proposed a price deduction of 5-15% each from September 22 across personal care, food & beverages in the case of HUL. However, according to the Government’s instructions last week, it is necessary to inform consumers about price changes.
