One year after GST, industry numbers suggest that the very small FMCG players are struggling; only the mid-level brands are left to give competition to national players.
JAYESH SHAH runs a wholesale-cum-retail grocery shop in Navsari, Gujarat. He claims he is one of the lucky few traders who emerged victorious from demonetisation because he was as comfortable with cheque payments as he was with cash. Now, in the Goods and Services Tax (GST) era, he proudly says he is GST compliant, though he murmurs in Gujarati that his costs have doubled due to GST. Filing monthly returns, hiring an accountant and having a resource who is computer friendly have added to his expenses. But as one gets into a conversation with him, one realises that GST has changed the way he does business. Till a year ago, he was keen to push locally manufactured brands. If a person came for a 10 soap, he would give him a lesser known brand such as Santosh even though he kept all major national brands such as Lifebuoy, Hamam and Godrej No.1. The local manufacturer gave him higher margins and longer credit com-pared to the established national brands. Similarly, in namkeens, he preferred regional brands such as Gopal Namkeen to the more established regional brands such as Balaji Wafers. The likes of Kurkure and Bingo were seldom seen. Now, things are different. “Aaj kal bade comapaniyon ke saath dhanda karne mein zyada maja ata hai,” Shah says in Gujarati accented Hindi.
GST has turned the tide in favour of the bigger com-panies and sales of locally produced brands have dipped by close to 30 per cent, he says. The latter are unable to give the kind of margins they used to offer in the preGST era. The reason is simple — most of them never paid taxes earlier. GST has brought them into the tax net. “It’s not that the likes of HUL or Dabur are paying us higher margins after GST. But if we sell 50,000 or 100,000 worth of their products a month, they pay us 2-4 per cent higher margins. The local brands give us nothing,” says Devi Das, a wholesale grocery dealer.
Denne historien er fra February 10, 2019-utgaven av Business Today.
Start din 7-dagers gratis prÞveperiode pÄ Magzter GOLD for Ä fÄ tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ?  Logg pÄ
Denne historien er fra February 10, 2019-utgaven av Business Today.
Start din 7-dagers gratis prÞveperiode pÄ Magzter GOLD for Ä fÄ tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg pÄ
Pension Scheme - Safety Net
The move to introduce the UPS has evoked mixed reactions. Analysts believe its funding will have limited impact on the fiscal math
The Reit Choice?
Real Estate Investment Trusts (Reits) Are Gaining Traction As Interest Rates Stabilise. But Returns Could Be Affected By Adverse Economic Conditions And Market Volatility
CORPORATE - Calling to Account
The sudden exit of Byju's auditor BDO marks the latest in a long series of setbacks for the edtech firm
EMPLOYMENT: Skills Push
The skill development ministry plans to partner with the UGC to improve the employability of undergraduates
Building on a Vision
L&T'S CHAIRMAN EMERITUS A. M. NAIK HAS BUILT A MAMMOTH ENTERPRISE THAT IS BUILDING A NEW INDIA, FROM ITS METRO RAIL SYSTEMS TO THE RAM TEMPLE
"KYS more important than KYC"
Vijay Kedia is a renowned equity investor; the value of his listed portfolio stands at around âč1,750 crore
ROXX STAR
THE THAR ROXX COMBINES LUXURY WITH PERFORMANCE TO MAKE A STRONG STATEMENT IN THE MID-SIZE SUV SEGMENT
HIT THE GROUND RUNNING
Smartwatches have become indispensable tools for runners, offering real-time insights into pace, distance, heart rate, and more. Here are a few you can consider
TURNING THE TABLES
INDIA'S FURNITURE MARKET IS POISED FOR A GLOBAL TAKE-OFF. ALREADY, A HOST OF GLOBAL BRANDS HAVE MADE THE COUNTRY THEIR HOME, BUT INDIAN COMPANIES ARE NOT TOO FAR BEHIND
THE EVOLUTION OF ATHERA
IDENTIFYING OPPORTUNITIES IN ADVANCE HAS STOOD THIS BENGALURU-BASED VC FUND IN GOOD STEAD. NOW, WITH A HEIGHTENED FOCUS ON TECHNOLOGY, IT WANTS TO SUSTAIN THE SUCCESS