Government to reinstate standardized Packs

Government to reinstate standardized Packs

According to leading Newspaper, Government is planning to bring back the standardized packing which earlier it had liberalized for the companies. With this many Fast Moving Consumer goods (FMCG) companies may face some headwinds, as they have to pack their goods as per standard weights which are issued by the legal Metrology (Packed Commodities) Rules, 2011. We feel the government should not keep tickling too much in the Industry and the move will not benefit to Consumer as well as to Companies.

Earlier, government had allowed the flexible packaging option for the companies as they were of the opinion that it will help them to cater various consumers at various levels. But the companies facing serious problems with rampant Inflation used them as the strategy and not according to consumer benefits. The Input cost (raw material prices) of the companies is rising and if they pass on the full effect to the consumers they may see demand for their products declining. On the other way round they slightly reduce the weights (gram of the products) keeping the price unchanged. A slight reduction in weight of 5 to 7 gram is unseen by the consumers while for the companies it proves to be of much beneficial. When the Input price cools off they still keep the price unchanged and now they increase the weights of their product attracting more consumer.

We cannot say that companies are fooling consumers but it is lack of consumer awareness. We feel the companies should adopt methods which easily convey that the weight or price of the product is changed and consumers should be fully aware before he buys the product.

Well, the move will help the consumer to some extent as they can now compare apple with apple. (Same products compared on the same grounds). But on the other hand affordability of the product which is major issue may drag consumer to use unbranded and cheap products. This will further impact consumer health or they will not be able to use better products. 

Approximately 60 per cent of the total revenue of the FMCG company comes from the product less than or equal to Rs 10. Standardized packs will destroy the low or small pack group which intern can prove costly for consumers (unable to buy) as well as to companies (lesser sales).

We feel the weights and the prices should be market driven and the government should not tickle much in the Industry. Better transparency from the corporate side and consumer awareness should be the key motive rather than standardizing the Packing of the product.