India’s largest and most popular biscuit maker Parle Products has said that it may have to lay off up to 10,000 employees amid the macro economic situation that is pointing towards a slowdown. Given that Parle’s biscuits have known to be the most affordable and widely consumed, this hints towards the fact that the economy is seeing a slowdown.
The main issue, according to the company, began with the government putting all biscuits under the 18% GST slab. Earlier, sub-below Rs 100 per kg biscuits were taxed at 12%. With the new tax structure, companies, including Parle, were forced to increase prices of their products.
Founded in 1929, Parle makes popular biscuits such as Parle-G, Monaco, Krack Jack, Marie biscuits, Milano, among others. However, Parle G has been its most popular product, which is typically sold in Rs 5 and 10 packs. Parle G was also considered the world’s largest selling biscuit brand in 2003. Parle clocks annual sales of over Rs 10,000 crore.
With most of its sales coming from the rural market, the 5% increase in prices led to a major decline in sales.
Mayank Shah, category head of Parle Products, says that the company has asked the government to reduce GST on biscuits in the sub-below Rs 100 per kg category. Mayank says that if the government doesn’t give the company the required stimulus, amid declining sales, it will be forced to layoff nearly 10,000 of its workforce.
According to an Economic Times report, Parle employs 1 lakh people, and operates 10 company-owned plants. It also has 25 third party manufacturing facilities.
And it’s not just Parle, the second largest biscuit maker in the country, Britannia too, has seen a decline in sales. MD Varun Berry was quoted as saying that consumers were thinking twice about buying products worth even Rs 5.