How FMCG cos navigated sales after structural GST changes

India's fast-moving consumer goods (FMCG) sector navigated a challenging second quarter as the implementation of new goods and services tax rates on 22 September disrupted trade channels and led to temporary moderation in sales across categories.

- Suneera Tandon

Under the new GST structure, many goods earlier taxed at 18%-including toothpaste, toothbrushes, hair oils, shampoo, soaps, biscuits, chocolates and Ayurvedic products-now attract 5% GST. Products taxed at 12%, such as instant noodles, cheese and namkeens, have moved to the 5% slab.

The change is expected to improve affordability over the long term, benefiting Hindustan Unilever, Colgate-Palmolive India, Tata Consumer Products, Dabur India, Godrej Consumer Products, Nestlé, Marico, Britannia, and Patanjali. But in the short term, most firms saw disruption in trade and inventory liquidation with both distributors and retailers adjusting to new prices.

Top listed FMCG firms selling biscuits, soaps, staples and juices saw mixed volume growth in September quarter, with the likes of Britannia seeing a dip while HUL reported flattish volume growth.

Which category of FMCG products were impacted by the revised GST rates?