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HLL, Tata Tea get excise-cut fillip

BS Corporate Bureau

The food processing sector including fruits drinks/preparations, pickles, ketchups and the like will be completely exempted from excise duty.

This has brought a sigh of relief to the major FMCG players involved in the production of these products. The companies include the giant HLL (Kissan pickle, jam and fruit punch), Nestle (Maggie ketchup and pickle), Dabur (Real fruit juice), Pepsi (Tropicana fruit juice), Heinz (tomato ketchup) and Marico (Sil jam).

The domestic tea industry is likely to benefit significantly from the Budget. The sector has been facing stiff competition from cheaper imports, and demand has remained sluggish.

The finance minister has announced doubling of the customs duty on imported tea to 70 per cent, while development allowance for tea plantations from the current 20 per cent to 40 per cent will also give a major fillip to the sector.

Tata Tea and Hindustan Lever will be the biggest beneficiaries as result of this.

Most FMCG companies declined to talk on the Budget. However, analysts said: "HLL will benefit the most. Dabur will be the other major gainer as will Nestle as it has the highest percentage of sales in the food processing segment."

Viewing the Budget positively, analysts said: "The Budget has been really welcome by all in the FMCG industry. The change holds a lot of potential for farmers and the consumers besides, the food processing industry and the consumers."

According to marketing consultant Jagdeep Kapoor: "The zero excise duty on foods products had existed earlier, but in recent years it had been reintroduced by the government. This has eventually burdened consumers with steep prices of the products. At least for a few years now, it should keep the excise duty on this particular sector as nil."

Source: Business Standard

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