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More players possible in processed foods after GST cuts

Instead of 18%, these products will attract a GST of 12% from July 1

Viveat Susan Pinto  |  Mumbai 

More players possible in processed foods after GST cuts

The decision to reduce the (GST) rate on processed foods such as pickles, sauces, ketchups and preserves could entice more entities to enter the sector, experts said.

Instead of 18 per cent, these products will attract a of 12 per cent from July 1. While price cuts by incumbents such as Nestlé or (HUL) could be in the offing, as a result, entry of majors such as ITC Foods is possible.

Sachin Menon, partner at consultancy India, says: “The revised rate structure for some processed foods makes it attractive for players looking to get into new categories. The government’s motive of slashing the on these products was intended to aid value-addition in food. The entry of new players could give this motive a fillip."

Abneesh Roy, senior vice-president at Edelweiss Financial Services, said existing players could either cut prices or increase launch activity in these segments. ITC Foods has been looking to get into new food categories as it looks to expand its revenue from this business. It has already stepped into luxury chocolates and gourmet coffee in recent months and is expected to strengthen its presence in juices and dairy. The company is also refocusing on the potato chip and cookies categories to grow share, beside working on segments such as noodles, where it now has 23 per cent, from an earlier  17 per cent.   An spokesperson, when asked, said the company would pass on net benefits from tax rates. While Nestlé India declined comment on the issue, the company is said to be evaluating the scenario.

Ketchups, for the record, have largely two key players in Nestlé and Preserves, that is, jams, has one key player in Pickles, in contrast, is largely dominated by regional brands.

Easy entry

* The Council on Sunday slashed the rate on processed foods to 12% from 18% 
* As a result, new players players could enter categories such as pickles, sauces, ketchups and preserves, experts say

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More players possible in processed foods after GST cuts

Instead of 18%, these products will attract a GST of 12% from July 1

Instead of 18%, these products will attract a GST of 12% from July 1

The decision to reduce the (GST) rate on processed foods such as pickles, sauces, ketchups and preserves could entice more entities to enter the sector, experts said.

Instead of 18 per cent, these products will attract a of 12 per cent from July 1. While price cuts by incumbents such as Nestlé or (HUL) could be in the offing, as a result, entry of majors such as ITC Foods is possible.

Sachin Menon, partner at consultancy India, says: “The revised rate structure for some processed foods makes it attractive for players looking to get into new categories. The government’s motive of slashing the on these products was intended to aid value-addition in food. The entry of new players could give this motive a fillip."

Abneesh Roy, senior vice-president at Edelweiss Financial Services, said existing players could either cut prices or increase launch activity in these segments. ITC Foods has been looking to get into new food categories as it looks to expand its revenue from this business. It has already stepped into luxury chocolates and gourmet coffee in recent months and is expected to strengthen its presence in juices and dairy. The company is also refocusing on the potato chip and cookies categories to grow share, beside working on segments such as noodles, where it now has 23 per cent, from an earlier  17 per cent.   An spokesperson, when asked, said the company would pass on net benefits from tax rates. While Nestlé India declined comment on the issue, the company is said to be evaluating the scenario.

Ketchups, for the record, have largely two key players in Nestlé and Preserves, that is, jams, has one key player in Pickles, in contrast, is largely dominated by regional brands.

Easy entry

* The Council on Sunday slashed the rate on processed foods to 12% from 18% 
* As a result, new players players could enter categories such as pickles, sauces, ketchups and preserves, experts say

image
Business Standard
177 22

More players possible in processed foods after GST cuts

Instead of 18%, these products will attract a GST of 12% from July 1

The decision to reduce the (GST) rate on processed foods such as pickles, sauces, ketchups and preserves could entice more entities to enter the sector, experts said.

Instead of 18 per cent, these products will attract a of 12 per cent from July 1. While price cuts by incumbents such as Nestlé or (HUL) could be in the offing, as a result, entry of majors such as ITC Foods is possible.

Sachin Menon, partner at consultancy India, says: “The revised rate structure for some processed foods makes it attractive for players looking to get into new categories. The government’s motive of slashing the on these products was intended to aid value-addition in food. The entry of new players could give this motive a fillip."

Abneesh Roy, senior vice-president at Edelweiss Financial Services, said existing players could either cut prices or increase launch activity in these segments. ITC Foods has been looking to get into new food categories as it looks to expand its revenue from this business. It has already stepped into luxury chocolates and gourmet coffee in recent months and is expected to strengthen its presence in juices and dairy. The company is also refocusing on the potato chip and cookies categories to grow share, beside working on segments such as noodles, where it now has 23 per cent, from an earlier  17 per cent.   An spokesperson, when asked, said the company would pass on net benefits from tax rates. While Nestlé India declined comment on the issue, the company is said to be evaluating the scenario.

Ketchups, for the record, have largely two key players in Nestlé and Preserves, that is, jams, has one key player in Pickles, in contrast, is largely dominated by regional brands.

Easy entry

* The Council on Sunday slashed the rate on processed foods to 12% from 18% 
* As a result, new players players could enter categories such as pickles, sauces, ketchups and preserves, experts say

image
Business Standard
177 22