FMCG companies may increase product weight instead of reducing product prices to pass on the benefits of the new GST to customers, allowing them to get more goods at the same price.
GST 2.0 effect on FMCG Products: Since the GST reform, prices of many products have declined. However, there was confusion regarding FMCG companies' packaging and pricing. The government has now clarified this situation. FMCG companies may increase product weight instead of reducing product prices to benefit customers under the new GST.
After the government clarified this, companies could begin increasing the weight of their products. For example, if a company sells an item for ₹2, its price would decrease under the new GST. The product would cost ₹1.77. Companies were faced with the challenge of collecting such a high price from customers. The government also didn't clarify how to address this situation. However, companies are now preparing to increase the weight of their products and sell them by November 15th.
Companies are preparing
According to reports, the company will be developing new packaging for its products in the coming days. These products will be available at the same prices as before, but their weight will increase by 6% to 12%. Companies may apply this weight-increasing formula to products ranging from 2 rupees to 20 rupees in packets. At the same time, prices of higher-priced products are expected to be reduced.
Experts say that companies place a heavy focus on products at this price point. Therefore, instead of reducing the prices of these products, they are focusing on increasing the volume or weight of the products. The company is changing the pack sizes of biscuits, shampoos, and other products. This is taking some time. While the prices of all these products will remain the same, the weight will increase by between 6 and 12 percent.
Prices reduced after GST 2.0
Following the GST reform, the prices of many everyday items have decreased. For example, a Parle-G biscuit, which used to cost ₹5, is now available for ₹4.45. A 500 ml bottle of Bisleri water is now selling for ₹9 instead of ₹10.
However, many retailers are still selling goods at the old rates. They say they don't have to change, so they are charging customers at the old rates. They sometimes offer candy or other small items in exchange for the change. Some are using UPI to sell goods at the new rates.
