Biscuits and confectionery major Parle Products said on Wednesday it may be forced to lay off up to 10,000 workers over the next one year due to the slowdown in demand coupled with the impact of high GST rate on low-priced products meant for the common man.
The company, which has a total of 10 manufacturing units of its own and another 125 through third-party manufacturers, currently employs a total of around one lakh people directly and indirectly in its biscuits and related business. "We have not laid off people, this would happen if things don't improve," Mayank Shah, senior category head, Parle Products said.
Elaborating the current challenges faced by the biscuits industry, he said the low-priced but high-volume category has seen a decline in sales of around 7-8 percent while the low-volume high-priced segment has witnessed the growth of around 8-9 percent in the first quarter of this financial year.
As a result, he said growth in the overall biscuits segment has come down to around 2.5 percent from double digits earlier. Shah said problems started for the industry when GST was implemented in 2017 when biscuits were clubbed in a single 18 per cent category in contrast to the earlier tax regime when biscuits priced below Rs 100 per kg were exempted from excise duty.
To discuss the slowdown in the economy, CNBC-TV18 talks to Sunil Khiani, head, retail measurement services, Nielsen South Asia and Abneesh Roy, executive vice president of institutional equities at Edelweiss Research.