HUL cut prices of detergents, soaps to pass on GST benefits

Mumbai: FMCG major Hindustan Unilever (HUL) today said the new tax regime of goods and services tax (GST) has not impacted the consumer offtake and expects the price cuts undertaken by it to drive sales.

"I don't think GST has impacted the consumer offtake. In fact, with us taking the lead in reducing the consumer price, it should give a fillip to consumer demand and consequently to the volume," HUL Chief Executive Officer and Managing Director Sanjiv Mehta said here.

The company had reduced the prices of some of its detergents and soaps, extending the tax benefits it got under the GST regime to consumers. Mehta said most of the trade channels are returning to normalcy, barring a few wholesale traders in the central part of the country.

"There are some channels like modern trade which have gone back to their normal rhythm, canteen store department, which had stopped buying a few weeks before the transition, they have started buying and they are slowly getting into the rhythm. There are sections of general trade in some parts of the country, which are limping back to normalcy," he said.

The company's topline and volume growth were impacted by 200 basis points with the canteen store department not buying from it. "I think the most affected still remains the wholesale in the territory of central India like Uttar Pradesh, Bihar, those are the cases where the traders are still sitting on the fence, waiting to understand what they need to do and how they need to react to the new era of GST," he said.

"I would believe that sooner or later, the trade channel should start unclogging and there would be some element of channel reset but the large number of wholesalers who are engaged in trade, would have to find ways and means of engaging with the trade, accepting GST is a reality and they will have to live with that," he added.