Impact of Lockdown on the FMCG Industry: Disruption in Supply chain and labour force

The corona virus pandemic and the lockdown have already had a big implication on global trade and commerce as countries have banned imports and exports and even shut down production of nonessential commodities.

- Amrinder Singh

India has already taken plenty of robust steps to ensure that coronavirus doesn’t cripple its economy like it has done to some countries across the world. The coronavirus lockdown has forced FMCG companies to step out of their comfort zones, as manpower shortage and shutting down of stores has brought the traditional distribution mechanism to a grinding halt.

People too have been fearful as the existing uncertainty about the essentials has contributed to a drop in levels in ‘stock-in-trade’ due to potential supply chain disruptions. Some impact has already been felt with deliveries of specific products have been delayed. The coming two-to-three weeks would be a testing ground on how supply chains are able to keep pace with the temporary rise in consumption. According to KPMG’s latest report, the market size of retail and consumer industry is USD 950 billion (2018-2019) but with the coronavirus pandemic and the lockdown have brought economic activity to a standstill and could impact investment, consumption and external trade – the three major contributors to GDP.

The current and potential impact on the sector is following:

Price Variation of key raw materials