Biscuit Maker Parle May Be Forced To Fire 10,000 Workers Amid Economic Slowdown
"Weakening consumer demand is because of increased GST on biscuits and worsened by the absence of adequate government stimulus."
Parle Products Pvt Ltd, India’s largest biscuit maker, may have to lay off around 10,000 workers due to the economic slowdown. As per a report in the Economic Times, Mayank Shah, category head at Parle Products said: “We have sought a reduction in the goods and services tax … but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people.”
He further said, “Weakening consumer demand is because of increased GST on biscuits and worsened by the absence of adequate government stimulus. We have multiple biscuit brands that are aimed at mid-and low-income consumers which form the core consumer base of a category such as ours, and we are hoping the GST increase will be rolled back if the government wants to revive demand.”
Following the roll-out of the goods and services tax (GST) in July 2017, biscuits were brought under the 18 per cent rate, forcing companies to raise prices. This reportedly impacted sales. And Parle is not the only food product company being affected. Earlier this month, biscuits maker Britannia Industries Ltd’s Managing Director Varun Berry said consumers were “thinking twice” about buying products worth just Rs 5, adding, “Obviously, there is some serious issue in the economy.”
India’s gross domestic product (GDP) growth has slowed to 6.8 per cent in 2018-19 — the slowest pace since 2014-15.
Parle owns popular brands such as Parle-G, Monaco, Milano, Hide and Seek biscuits and Mango Bite toffees. It has a turnover of more than Rs 10,000 crore and employs over one lakh people. Parle operates ten company-owned manufacturing facilities, in addition to 125 third party plants. More than 50 per cent of the company’s sales reportedly come from rural markets.