New Delhi: The government has deferred the implementation of rules on pack sizes by four months, pushing the deadline to 1 November, besides relaxing some of the proposed norms at the lower end of the price spectrum, following months of lobbying by consumer goods companies.
The original deadline for the implementation of the rules was 1 July. In a notification by the department of consumer affairs on the Legal Metrology (Packaged Commodities) (second amendment) Amendment Rules, 2012, the government exempted so-called value-based packs priced between Rs 1 and Rs 10 from standardization.
This will allow consumer goods companies flexibility in weights and sizes for lower-priced products.
“This has been done keeping in mind the customer at the bottom of the value chain, who has very little daily disposable income,” said B.N. Dixit, director, legal metrology, at the consumer affairs ministry.
The move comes in response to recommendations by various industry bodies such as the Federation of Indian Chambers of Commerce and Industry (Ficci) and the Confederation of Indian Industry (CII).
Some leeway: The government has provided certain relaxations in weight for categories of bread, biscuits, beverages, and packaged water. Pradeep Gaur/Mint
“The extension of the timeline by another four months will provide industry the time to prepare and ensure compliance,” said Dev Bajpai, executive director, legal, Hindustan Unilever Ltd, India’s largest consumer goods company. “The exemption to value-based packs will protect consumer interests in a significant manner, particularly low-income consumers who are dependent on these packs for access to daily usage products.”
Mayank Shah, group product head at Parle Products, the company that makes Parle-G biscuits, affirms the positive move by the government, “The exemption of sub-Rs 10 price points is a very pragmatic move by the government. This is where it could have possibly hurt both consumers and companies since any increase in input costs results in a relative increase or decrease in price point or size.” Currently 60% of all organized packaged foods is sold in price points of less than Rs 10.
GlaxoSmithkline Consumer Healthcare Ltd said it had been “prepared” to implement the new rules from 1 July. However, it welcomed the government’s move to defer the laws as “there is inventory in the market,” said the company’s spokesperson.
The company endorsed the relaxation in lower-priced packaging, as it serves the bottom of the pyramid segment.
The government wants to standardize packaging to help consumers cut through the plethora of different sizes and measures to compare prices. Some companies have sought to hold on to price points in the face of surging input costs by reducing pack sizes.
Companies have in the past changed to non-standard packs in a bid to protect themselves from inflationary pressures, Dixit said.
The government notified that “promotional offer” packages would have to carry information such as net weight, market retail price, manufacturing date, consumer care details and the name and address of the manufacturer.
“Earlier, companies were not doing so,” Dixit said. “Instead, they would add extra quantity to their product, for instance get 25gm more, etc. This would not be allowed from now on.”
Any overseas company seeking to introduce an international package size of their product in India would have to seek prior permission from the government to do so.
“The central government may after ascertaining the genuineness of the case stated in the application, permit a manufacturer or packer or importer to pack or sell of the packages other than specified in the schedule for a maximum period of one year, by relaxing the rules,” according to the notification.
After this period, they will have to shift to standard sizes allowed by the new schedule. Dixit said this would keep the Indian market open and flexible for global firms to enter.
The government has also provided certain relaxations in weight for categories of bread, biscuits, constituted or reconstituted beverages, and packaged water. As per the notification, bread can be sold in multiples of 50gm upto 500gm and above 500gm in multiples of 100gm. Earlier, bread was only sold in multiples of 100gm packs. Biscuits can be sold in packs of up to 5kg as opposed to a maximum of 1kg earlier.
Constituted and unconstituted beverages upto 50gm have been exempted from any restrictions. “This has been done keeping in mind public health and patients who need to take small dosage of liquids for medicinal purposes,” said Dixit.
Bottled drinking water can be made available in pack sizes of 10 litres, 15 litres and a maximum of 25 litres. The pack size is currently limited to 5 litres.