The Hindu Business Line

Single-door refrigerat­ors may turn costlier on stricter BEE norms

Existing 5-star and 4-star-rated refrigerat­ors will be downgraded from next year

- AFP MEENAKSHI VERMA AMBWANI

People hold up 100-Bolivar notes during a protest over lack of cash as the new bank notes have not yet appeared, at San Cristobal in Venezuela’s Tachira state. Venezuelan­s lined up to deposit 100-unit banknotes before they turned worthless, but replacemen­t bills had yet to arrive, increasing the cash chaos in the country with the world’s highest inflation As stricter energy labelling norms kick-in from January, prices of direct cool refrigerat­ors are expected to shoot up by ₹2,000-4,000. Industry players believe this would impact the demand for 5-star and 4-starrated direct cool refrigerat­ors, also known as single-door refrigerat­ors.

The Bureau of Energy Efficiency (BEE) has tightened norms for single-door refrigerat­ors by two levels. This will mean that the existing 5-star and 4star-rated direct cool refrigerat­ors will be downgraded to 3-star and 2-star, respective­ly, in January. The industry will also need to introduce more efficient and costlier 5-star and 4-star-labelled single-door refrigerat­ors to meet these new norms.

Companies will have to use inverter compressor­s and vacuum insulation panels to manufactur­e the new range of direct cool refrigerat­ors, which will increase their costs.

Kamal Nandi, Business Head & EVP, Godrej Appliances, said, “Nearly 75 per cent of the sales in the direct cool refrigerat­or segment currently comes from the 4-star and 5-star models. But the new norms will push the costs up for manufactur­ing the 4-star and 5-star direct cool refrigerat­ors. Therefore, we anticipate the overall consumptio­n will shift to 3-star and 2-star-rated models.”

Nandi said since stricter energy-labelling norms were introduced in the frost-free refrigerat­or category, the industry has seen very little demand for the 5star-rated frost-free refrigerat­ors. “Direct cool refrigerat­ors are preferred by the masses, who are even more price-conscious so we anticipate seeing similar trends in this category,” he added.

Sales may be hit

While the industry is already dealing with the dip in demand due to demonetisa­tion, the new energy labelling norms may become a double whammy of sorts.

“The new energy labelling norms as well as the increase in commodity prices may lead to increase in costs for direct cool refrigerat­ors by as much as 10 per cent. This may lead consumers to increasing­ly opt for 2star and 3-star rated single door refrigerat­ors,” said CM Singh, COO, Videocon.

Industry players also believe that unlike the air-conditione­r segment, consumers may not see enough incentive to pay a premium to shift to more energy-efficient refrigerat­ors.

ACs are known to be power guzzlers and consumers see benefits in shifting to more energyeffi­cient ACs. However, since refrigerat­ors do not consume a lot of electricit­y, industry players believe consumers may not want to pay a premium to shift to more energy-efficient ones.

The consumer durable industry has also been urging the government to give incentives to consumers in terms of tax breaks or subsidies to encourage them to shift to higher star-rated appliances.

 ??  ?? Companies will have to use inverter compressor­s and vacuum insulation panels to manufactur­e the new range of direct cool refrigerat­ors, which will increase their costs.
Companies will have to use inverter compressor­s and vacuum insulation panels to manufactur­e the new range of direct cool refrigerat­ors, which will increase their costs.
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