Parle Products expects uptick in demand by January: report1 min read . Updated: 27 Dec 2019, 10:44 AM IST
- Mayank Shah of Parle Products said with increased burden on raw materials the firm is likely to take a price hike next year
- Parle Products have been seeking a reduction in tax slabs on mass biscuits since 2017, after the govt clubbed them in the same tax bracket as premium cookies
NEW DELHI : Parle Products expects consumer demand to bounce back from January even as the biscuit maker expects to take a price hike early next year amid increasing raw material prices.
In an interview with ETNow, Mayank Shah, category head, Parle Products -- the company that sells the popular Parle-G biscuits and Hide & Seek cookies—said “since the last one-two months, we are seeing a revival in demand. That is an impact of liquidity." Shah added that a cut on corporate taxes has helped companies spend more on consumer promotions, “given the cut in corporate tax by the government that has provided a cushion and hopefully in the last quarter, we should see demand returning to probably the last year’s levels. We are very hopeful about it. We are seeing those are early signs and hopefully from January onwards, we will see demand picking up."
Consumer goods makers have had a tepid 2019 as demand cooled off across several categories, including packaged foods. This is especially true in rural markets where a stagnant wage growth has weakened the consumer's ability t0 spend.
Moreover, biscuit makers have been seeking a reduction in tax slabs on mass biscuits since 2017, after the government clubbed them in the same tax bracket as premium cookies—doing away with a varied tax structure and bringing all biscuits in a single tax bracket. This, has prompted manufacturers to reduce the size of biscuits offered per pack amid growing cost pressures and even take price hikes.
Shah added that with increased burden on raw materials the company is likely to take a price hike next year.
“The prices of all three key inputs -- sugar, wheat flour and edible oil -- have seen double digits hike compared to last year," he said.
"Since we are passing through a lean phase as far as demand is concerned, most companies have held back on prices. But hopefully, as we are seeing a revival in demand, in the next quarter, the company will hike prices," Shah said.