There is news that the health ministry bars selling of non-tobacco products from tobacco-selling shops. How will this directive impact FMCG sales is the big question.
B Krishna Rao, Category Head-Marketing, Parle Products clarified that they haven't yet officially heard about this notification but if it is in the interest of the society they would have to abide by it and accept it.
Talking about the impact on FMCG sales, he said if this comes through then it would have a huge bearing on the overall FMCG segment because if one were to look at the FMCG universe, out of the 10 million FMCG stocking outlets, 2.5 million outlets are of pan bidi shops and they contribute around 8 percent of the FMCG sales.
He further said there are many general stores which sell tobacco products and lot of pan bidi shops that sell FMCG products. So the sale of products could get offset with general stores refraining from selling tobacco projects and pan bidi shops will refrain from selling FMCG products. However, since the point of sales would be impacted, it would in turn impact the FMCG sales.
In terms of segments like confectionary, snacks, biscuits, bread, milk, beverages, water etc the pan bidi shops have a significant contribution to the revenues of FMCG companies because they are an additional and convenient point of sale.
So, the impact on sales could be around 30 percent in case of confectionery and 20 percent on snacks, he said.
According to him, it will be really difficult to monitor and control this because most of this pan bidi kind of outlets come under unorganised space.
However, one will have to respect such a notification, which will prohibit youth and children from going closer to such places that sell tobacco items, said Rao. Such a directive is definitely positive and in the interest of the youth, he added.