NEW DELHI: Following the implementation of lower GST rates, FMCG companies are facing challenges in pricing products at traditional “magical” price points but expect these to be restored within the next two months.
Popular price packs—like sachets of biscuits, candy, spices, and other household items—targeting middle-class and rural consumers have seen their prices adjusted. For instance, a small pack of Parle G biscuits, previously priced at Rs 5, now costs Rs 4.5, while a shampoo pouch has been reduced from Rs 2 to Rs 1.75.
With limited time to reprint packaging, companies have launched products at these “non-standard” prices to immediately pass on the GST benefits to consumers. Experts note that increasing pack sizes to maintain round-number pricing would require factory mould changes, a process that takes time.
Parle Products Vice President Mayank Shah told reporters here., “This is a temporary situation. Typically, changes in pack weight and pricing take about one and a half to two months. Right now, our October and November wrappers are already printed, so adjustments are being made through non-standard price points.” He added that consumers can buy multiple packs or pay via UPI to ease small-payment issues.
The GST Council’s recent reforms, effective September 22, introduced a simplified two-tier GST structure of 5% and 18%, replacing the earlier four-rate system. This has resulted in price reductions across a wide range of items—from food, toiletries, and cosmetics to electronics like TVs and air conditioners.
Industry analysts view these non-standard prices as short-term measures. Abneesh Roy of Nuvama Institutional Equities said, “Companies will soon restore the traditional Rs 2, Rs 5, and Rs 10 price points with increased pack sizes. These price points are crucial for driving volume growth.”
Dabur CEO Mohit Malhotra emphasized that the company has adjusted its pack prices to reflect GST cuts without compromising quality. “We’ve proactively revised prices across our portfolio, including popular low-unit packs, to ensure affordability for all consumers,” he said.
