After GST reforms, FMCG companies have started selling products at old prices by increasing pack weights to benefit customers. Companies like Parle, Bisleri, and Mondelez have prepared packs with up to 11-12% more weight. This will provide relief to consumers and ease transactions for shopkeepers.
GST reform: Following recent cuts in GST rates and clear instructions from the government, FMCG companies have altered their product planning. Major companies like Parle, Bisleri, and Mondelez are bringing products to the market with increased pack weights at old prices. This will give consumers larger quantities in popular ₹2, ₹5, ₹10, and ₹20 packs. This change will benefit customers and simplify transactions for shopkeepers, while Amul is still awaiting a formal order.
More weight at old prices
After the reduction in GST rates, companies decided to retain old packs and prices but slightly increase the pack weight. This will provide consumers with more goods at lower prices. This change will be particularly noticeable in everyday items such as biscuits, snacks, cinnamon, sugar, and dairy products. Now, more quantity of goods will be available in the market at popular price points like ₹2, ₹5, ₹10, and ₹20 compared to the old packs.
After the GST rate cuts, effective September 22, companies faced problems due to ambiguity in regulations. The government had not clarified whether companies could sell products with increased weight at old prices. As a result, brands reduced prices unevenly. For instance, a ₹5 pack of Parle-G started selling for ₹4.45, and a ₹1 candy was available for 88 paise. This caused inconvenience to both shopkeepers and customers.
Customer and shopkeeper inconvenience
Customers were dissatisfied due to non-round prices. They faced difficulty in giving or receiving change. Many shopkeepers would balance it out by giving sweets or candies to customers. Those making digital payments were charged the full amount, further increasing disparity and inconvenience.
Government issues clear directive
The government has now clarified that if companies increase the pack weight while selling goods at old prices, it will not be considered a violation of GST rules. Following this, major FMCG companies like Parle, Bisleri, and Mondelez have started preparing new packs at old prices. According to an ET report, Mayank Shah, Vice President of Parle Products, stated that biscuit and snack packs will now have up to 11-12 percent more weight, but the prices will remain the same.
Production of the new packs has already begun in the snacks industry, as it does not require significant changes.
Amul awaits formal order
Meanwhile, Amul has refused to revert to old prices for now. Jayen Mehta, Managing Director of Amul, states that until the government issues a formal order, there will be no change in the grammage and price of their products. He believes that customers will only benefit when a clear balance between packaging and price is demonstrated.
Big impact of a small change
FMCG companies had previously reduced packet weights during times of inflation to maintain price points like ₹5 or ₹10. Now, to pass on the benefit of GST cuts directly to consumers, companies are introducing packs with more weight at old prices. This will be reflected in increased customer satisfaction and convenience for shopkeepers.
Customers will now find it easier to shop with more content available at old prices, and shopkeepers will avoid the hassle of loose change during transactions. This will also strengthen the brand image of FMCG companies and increase customer trust in the market.
