MUMBAI : The sweeping reform, rolled out on September 22, simplified the GST structure from four slabs to just two, 5% and 18%, but left FMCG players scrambling. With little time to adjust factory molds and packaging sizes, brands have passed on tax benefits directly to consumers through unconventional prices such as Rs 1.75, Rs 4.45, and Rs 8.90.
Parle G, famous for holding onto its Rs 5 tag for two decades, now retails at Rs 4.45. Shampoo sachets, once sold for Rs 2, are now down to Rs 1.75. Mondelez has shifted Oreo cookies to Rs 8.90 and Bournvita to Rs 26.69, while Nestlé India not only cut Maggi noodles from Rs 120 to Rs 116 but also increased pack size from 500g to 600g. Dabur trimmed Real Juice prices from Rs 130 to Rs 122 and Chyawanprakash from Rs 475 to Rs 440.
Industry executives admit the pricing disruption is temporary. “Ultimately, companies will increase volumes and come back to coinage of Rs 2, Rs 5 and Rs 10, because clearly Rs 4.5 or Rs 4.6 is not practical,” said Abneesh Roy of Nuvama Institutional Equities.
The so-called magical price points are critical to driving sales in rural and middle-class markets, where affordability and habit shape buying patterns. Analysts expect manufacturers to restore standard price tags within two months, largely by tweaking pack sizes to absorb tax changes.
The recent GST reform has forced FMCG companies to abandon traditional Rs 2, Rs 5, and Rs 10 pricing, opting for unconventional prices like Rs 1.75 and Rs 4.45. This change, driven by a simplified tax structure, is expected to be temporary as companies plan to adjust pack sizes and return to familiar price points to cater to rural and middle-class consumers.