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FMCG growth hinges on policies, feel honchos

20-December-2005
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FMCG growth hinges on policies, feel honchos

Domestic fast moving consumer goods (FMCG) industry, which has over the past year started showing growth, has the potential to grow even faster, if certain roadblocks like the tax structure are remedied.

This was the feeling echoed by many of the participants at the Fourth National FMCG Conclave organised by the Confederation of Indian Industry here.

K Venkatachalam, managing director, Kelloggs India, pointed out that the level of indirect taxation in the country was as high as 27 per cent compared with global rates of between 5per cent and 10 per cent.

This high cost structure needs to be rationalised through a common GST he said, adding that packaged foods should not be treated as non-essential items.

This is even more important today with most commodities, too, making the move into the branded space.

Earlier in the day, Subodh Kant Sahai, Minister-Food Processing Industries, Government of India, said there was a need to have mega food parks in the country which would serve as a stepping stone for high growth in the food processing sector.

Speaking on the huge opportunities in the food sector, Partha Mukherjee, director, corporate and legal affairs, GlaxoSmithKline Consumer Healthcare, said, “It is important to encourage innovation in the sector, but, at the same time, we need to have more stringent laws in place to deal with the problem of counterfeits in the sector.”

One suggestion was having a special cell in place to handle these issues. Adding to that, Narendra Ambwani, managing director, Johnson & Johnson said, “Counterfeiting is the biggest challenge that the sector faces today, but more than changing the present laws their implementation needed to be made stronger.”

Earlier in the day, the importance of innovation in the sector was touched upon - not just on the product front but also on the marketing side of it.

Sripad Nadkarni, director, MargetGate Consulting, said when trying to find a common ground between the urban and the rural markets, it was important to find a universal common factor, but not the lowest common denominator between the two, as that would adversely affect the product.

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