Amid the ongoing consumption slowdown in the country, India’s biggest biscuit maker – Parle Products Pvt Ltd has hinted to layoff up around 8,000 – 10,000 employees if the economy does not recover, reported NDTV.
Parle Products’ category head – Mayank Sah has on August 21 said that to avoid such layoff up, they have asked the government to cut goods and services tax on biscuits priced at Rs 100 per kg or below which are typically sold in packs of Rs 5 and below.
He said, “The situation is so bad, that if the government doesn’t intervene immediately… we may be forced to eliminate these positions”. Parle Products which manufactures famous biscuits such as Parle G, Monaco and Marie was founded in 1929, employs about 1,00,000 people, including direct and contract workers across ten company-owned facilities and 125 contract manufacturing plants.
Blaming the introduction of GST in 2017, Shah said that the demand of the once-popular Parle G dropped drastically. A heavy tax was levied on biscuits costing as low as Rs 5 a pack. Prior to GST, the Parle G biscuits which were below Rs 100 per kg were taxed at 12 percent. However, after the implementation of the GST, the biscuits were brought under 18 per cent tax structure. To cope up with the heavy tax, the company decreased the no. of the biscuits in each packet, which lead to a drop in sales.
Shah said that the people are extremely priced sensitive and they are conscious about the number of biscuits they get for a price. Parle had earlier held talks with the GST council comprising of former finance minister Arun Jaitley prompting them to review the taxes.
Britannia also not happy
Britannia, another biscuit manufacturing giant, had flagged a similar issue last week. Britannia’s director Varun Berry had said that the consumers are thinking twice before buying a Rs 5 pack of biscuit. He said that the company has only grown 6 per cent and the market is growing slower than that.
Market researchers Nielsen last month had said that there had been a significant slowdown across all food as well as non-food categories. Nielsen revised its growth forecast for the Fast-moving consumer goods (FMCG) sector to 9 -10 per cent in 2019 from the previous projection of 11 -12 per cent.
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The post “Situation Is So Bad” That India’s Biggest Biscuit-Maker Parle May Lay Off 10,000 Employees appeared first on The Logical Indian.