Plastic ban to have minimal impact on listed FMCG firms’

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Non-durable consumer goods known as fast-moving consumer goods (FMCG) are in high demand since they often have a low price and high utility. They use items like toothpaste, prepared meals, soap, cookies, notepads, and chocolate as examples.

Typically, these items are piled high on the shelves of large shops like Walmart. Low price, strong desire, and limited durability are some FMCG characteristics that help them move rapidly off the shelves.

Fast-moving consumer goods (FMCG) are by definition not long-lasting. They are in great demand and reasonably priced for the majority of people.

Processed foods, beverages, cosmetics, toiletries, health products, consumer electronics, etc. are a few examples of FMCG.

Due to their low price, strong demand, and limited durability, FMCG products can be quickly cleared from store shelves. Since many of them are packaged, they are also sometimes referred to as CPGs or consumer packaged products.

The success of many FMCG companies can be attributed to careful planning, innovation, localization, diversification, and investment. Nestle, Coca-Cola, and P&G are a few well-known FMCG companies. A crucial component of product delivery is the distribution route.

In a report published on Monday, analysts at Kotak Institutional Equities predicted that India’s decision to outlaw some single-use plastic (SUP) products will have little effect on the financial performance of listed companies in the fast-moving consumer goods (FMCG) sector.

Since July 1st, the Centre has prohibited the production, importation, distribution, and sale of single-use plastic products nationwide. The list includes plastic earbuds with sticks, balloon sticks, flag sticks, candy sticks, ice cream sticks, polystyrene decorations, plastic plates, cups, and glasses, as well as silverware including forks, spoons, knives, and straws.

Manufacturers of listed packaged consumer goods are frequently exposed to products like straws and other similar items.

In the near term, volumes or profitability of several consumer good categories, especially for the more affordable stock-keeping units, could be impacted by a potential ban on other single-use plastic goods such as  pouches, wrappers, and laminated tubes.

Less than 2-3% of the plastics used to make these illegal single-use plastic goods, they added.

With a discharge of 3.5 million tonnes in FY20, India has the dubious distinction of being the fifth greatest country in terms of plastic garbage generation. Over the years FY2016–20, India’s production of plastic garbage has nearly doubled on a per-capita basis.

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