May­on­naise, salad dress­ings to get cheaper af­ter re­vised GST

Com­pa­nies will re­duce prices by 8-10 per cent

The Hindu Business Line - - NEWS - MEENAKSHI VERMA AMBWANI

Af­ter the GST Coun­cil put may­on­naise and salad dress­ings in the 12 per cent tax slab, from the ear­lier 18 per cent, some condi­ment com­pa­nies have de­cided to re­duce prices. The re­duc­tion on prices on may­on­naise and salad dress­ing prod­ucts is in the range of 8-10 per cent.

Oliver Mirza, MD & CEO, Dr. Oetker In­dia, said, “In line with the re­vised GST rates and in­put tax ben­e­fits an­nounced by the GST Coun­cil, we have passed on the GST ben­e­fit to our con­sumers. The rates on the FunFoods range of may­on­naise and sand­wich spreads have been re­vised and con­sumers can now avail the ben­e­fits of up to 8 per cent on the ex­ist­ing MRP.”

The com­pany said that it started man­u­fac­tur­ing prod­ucts with re­vised MRP from De­cem­ber 1 and that the first batch has al­ready hit the mar­ket.

While may­on­naise is known to out­sell ketchup in mar­kets such as the US, in In­dia ketchup is a much big­ger seg­ment com­pared to may­on­naise. As per in­dus­try es­ti­mates, may­on­naise seg­ment is ex­pected to touch the ₹1,000crore mark in terms of re­tail sales value grow­ing at CAGR of 22-23 per cent.

San­jey Ba­jo­ria, Man­ag­ing Di­rec­tor at Ba­jo­ria Foods, which dis­trib­utes and mar­kets the in­ter­na­tional may­on­naise brand Amer­i­can Gar­den in In­dia, also con­firmed re­duc­tion in prices. “We have re­duced prices in the range of 8-10 per cent across may­on­naise and salad dress­ing prod­ucts. The new stocks with the re­vised MRP are now avail­able on the shelves. We have also been af­fix­ing stick­ers to in­form con­sumers about the new prices on old stocks,” he said.

In June, the GST Coun­cil had put ketchup at 12 per cent tax slab, while may­on­naise was at 18 per cent. This had dis­ap­pointed some play­ers as they urged the gov­ern­ment to put all condi­ments es­pe­cially ketchup and may­on­naise in the same tax bracket for a level play­ing field.

But, whether all brands will fol­low suit re­mains to be seen. A se­nior ex­ec­u­tive of a pack­aged food com­pany added, “When the GST tax rate on may­on­naise was in­creased to 18 per cent, we did not hike prices but ab­sorbed the costs. Now the re­duc­tion in the tax rate has come when the raw ma­te­rial prices have shot up con­sid­er­ably. The seg­ment is highly com­pet­i­tive and op­er­ates on thin mar­gins. Com­pa­nies have also been run­ning dis­count schemes on may­on­naise through the year. ”

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