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FMCG firms primed for a QR lift

Reeba Zachariah

The lifting of quantitative restrictions (QRs) on April 1, 2001, in line with the World Trade Organisation (WTO) guidelines is likely to provide a fillip to imports in the FMCG sector.

An official spokesperson of Hindustan Lever said, " the company will continue to import and market products, wherever it thinks is beneficial."

In the recent past, consumer goods giant Hindustan Lever had been directly importing and marketing products like Calvin Klein range of cosmetics and fragrances, Magnum and Viennetta ice cream from Unilever's global portfolio. "These products are where there is increased demand but are yet to attain a critical mass for local manufacturing to be established," the official said.

However, the Rs 100 billion company is confident of its growth targets, even though quantitative restrictions have been removed in all categories the company operates in.

Abhijit Sanyal, chief operating officer of United Distillers and Vinters (UDV) said: "The high import tariff of 224 per cent, which includes surcharge and countervailing duty, which are not specified as of now, prohibits us from importing scotch whisky. However, we are looking at importing Johnnie Walker and J&B Scotch Whiskey in the market."

Sanyal said an imported scotch whisky will cost between Rs 2600 to Rs 3200 and scotch brands bottled in India, such as White Horse, Black & White and Vat 69, are available between Rs 750 to Rs 1250.

The official spokesperson of Procter & Gamble Hygiene & Healthcare said: "We do not anticipate any major impact. Our products are of superior global quality, competing in markets across the world. The company is already importing products such as Head & Shoulders shampoo and Whisper Ultra feminine care. Sources close to P&G said that the company in the past had been importing and would continue to do so. However, the spokesperson declined to comment on future plans of the company.

Rajeev Karwal, senior vice-president of Philips India said: "We will be importing high-end products such as Plasma TVs and audio products targeted at niche consumers."

According to Colgate-Palmolive, "the company manufactures most of its products in India unlike shaving gels which is in the premium segment are imported. However, if there exists a opportunity and need arises, we will look at it."

Industry analysts expect the players in the FMCG sector widening their product portfolio as the quantitative restrictions are lifted. "The lifting of QRs offers both opportunities and threats for the companies. It's a matter of logistic decision," analysts tracking the FMCG and consumer electronics sectors said.

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